Annual Report 2020 2 Annual Report 2020 Annual Report 2020

3 Contents

01 02 03

Foreword from the Brief Portrait Development Family Shareholders of the Group and Outlook ------

06 Introduction 08 About the Group 18 The Liebherr Group in 2020

4 Annual Report 2020 04 05 06

Reports on the Group Companies Consolidated Product Segments --- Financial Statements ------

34 Earthmoving 58 Summary of Group Companies 68 Consolidated Balance Sheet 36 Material Handling Technology 69 Consolidated Income Statement 38 Deep Foundation Machines 70 Consolidated Statement of 40 Mining Comprehensive Income 42 Mobile and Crawler Cranes 70 Consolidated Statement of 44 Tower Cranes Changes in Equity 46 Concrete Technology 71 Consolidated Cash Flow 48 Maritime Cranes Statement 50 Aerospace and Transportation 72 Notes to the Consolidated Systems Financial Statements 52 Gear Technology and Automation 88 Report of the Statutory Auditor Systems 89 Five-Year Summary 54 Refrigeration and Freezing 56 Components

Contents 5 Foreword from the Family Shareholders Business Year 2020 ---

The family shareholders active Dear readers, in the Group (from left to right): Jan Liebherr, Stéfanie Wohlfarth, Sophie Albrecht, Philipp Liebherr, 2020 was a year unlike any other. The corona- Patricia Rüf, Johanna Platt, Isolde virus pandemic affected us in ways we could Liebherr, Willi Liebherr never have imagined and presented us with many unprecedented challenges. How does one evaluate such a year from an entrepreneurial perspective and measure success in times like these? We could perhaps start by examining the usual key figures from our balance sheet or the Profit & Loss statement. However, economic success seems to pale in significance at a time when people’s wellbeing is the main priority. Health is and remains the most important consideration. This is why over the past year, our top priority has been to minimise the risk of infection among our employees, their families and our business partners, whilst ensuring that the business continues to run smoothly. This required an enormous effort and demanded a great deal from our employees.

We would like to take this opportunity to thank our employees in particular. We would not have withstood the challenges of the past year without the outstanding efforts of our nearly 48,000 employees. They have shown incredible commitment under the most difficult circumstances and have demonstrated a huge amount of creativity and loyalty. We would therefore like to thank everyone at Liebherr for their contribution during these times, which are also challenging on a personal level. In view of this, we feel even more proud to report that the Group’s total

6 Annual Report 2020 turnover has exceeded well over € 10 billion. ards for our customers. For example, we have developed So how should we put this year into perspective? Sales many new machines, components and technologies to inevitably fell after three years of strong growth, which drive forward energy-efficient innovations in building affected some of our product segments more than others. construction, transport, air travel and refrigeration. We We were even forced to introduce HR policy changes in one are also developing new fuel cell systems and automation part of our business. However, the impact of the pandemic concepts for battery pack assembly. Our digital tools, such on the Group as a whole was significantly less than we had as the Crane Planner, MyJobsite and our Remote Service originally thought it would be at the outset. We could even App have also ushered in new and sustainable ways of close the year with a positive operating result. Our Group working and have allowed us to explore new ways of dis- has proven its strength. In a time that is characterised by tributing our products and providing customer service. social distancing, we have managed to remain close to our Today, we can therefore draw a positive overall conclu- customers, figuratively speaking. We maintain long-stand- sion from the year 2020. It has shown us that we will get ing partnerships with many of them and we know that we through the pandemic together and it allows us to view the owe our positive year-end results to the continuing trust 2021 financial year with optimism. our customers have placed in us. Therefore, we would like to express our sincere gratitude for their loyalty. We will ensure that they can continue to count on the quality of our products and services.

In 2020, we worked on numerous future-looking solutions Dr. h.c. Dipl.-Kfm. Isolde Liebherr Dr. h.c. Dipl.-Ing. (ETH) Willi Liebherr to ensure that we continue to achieve the highest stand- Presiding Committee of the administrative board of Liebherr-International AG 02

Brief Portrait of the Group

8 Annual Report 2020 9 Brief Portrait The Liebherr Group

Founded in 1949, the Group today comprises over 140 companies on all continents and employs 47,925 people.

The Liebherr Group is a technology company with a broadly particular durability. With its innovations and visionary diversified product programme. The company is one of the technologies, the company strives to inspire its custom- world’s largest manufacturers of construction machines, ers. In the process, the limits of what was previously pos- but also offers high-quality, user-oriented products and sible are constantly being redefined, enabling Liebherr to services in many other fields. The Group’s holding company frequently contribute to technological progress. Working is Liebherr-International AG, based in Bulle (Switzerland). together on these fascinating tasks creates a strong All its shareholders are members of the Liebherr family. For bond that Liebherr’s employees can rely on – across na- the family company, long-term success, sustainable devel- tional borders and continents. opment, stability and reliability matter.

Liebherr develops and manufactures an enormous variety of fascinating products. They are renowned on world markets for their high precision, excellent design and

Principal locations of Liebherr companies

10 Annual Report 2020 10,341 605 € m turnover € m investments 47,925 employees > 40 > 140 production companies companies

13product segments Self-concept

The Liebherr Group was founded in 1949 by Hans An elementary part of the company are its Liebherr, a man driven by passion, visionary employees: each individual contributes with ideas and with a flair for future-looking tech- personal ideas and commitment to create great nology. To this day, Liebherr has demonstrated things – no matter how demanding the task at stability and reliability, thanks to the personal hand. Liebherr reacts flexibly to the wishes of commitment of the company’s owners and the its customers and offers custom-built solu- self-concept as a family-ompany, and is known tions. With innovative technologies, the limits as a pioneer of future-looking innovations with of what is possible are constantly being rede- the highest-quality standards. Liebherr is and fined. The close customer relationships and the remains a wholly family owned business with high value placed on customer benefit build the a high degree of freedom of action and deci- foundations of the Group’s success and form an sion-making in all of its activities. A high equity important part of its tradition as a family com- ratio and diverse product portfolio allow the pany. As descendants of the company founder Liebherr Group to compensate for market-relat- the family shareholders are conscious of their ed economic fluctuations. The value-oriented entrepreneurial responsibility. What matters are corporate culture ensures a strong bond and a long-term success and sustainability as bases trusting relationship with partners and cus- for future development and a solid financial tomers over years and decades – characterised standing – profits are reinvested and, by re- by fairness and mutual respect. Maintaining maining within the company, thus guarantee the integrity as a business partner and job security future of the Group. are important corporate directives.

Liebherr-International AG

Company Information

Head office CH-1630 Bulle / FR

Share capital CHF 100,000,000

Shareholders Liebherr family (100 %)

Dr. h.c. Willi Liebherr, Chairman Dr. h.c. Isolde Liebherr, Vice-Chairman Hubert Liebherr Sophie Albrecht Administrative board Jan Liebherr Patricia Rüf Stéfanie Wohlfarth Johanna Platt Philipp Liebherr

Andreas Böhm Dr. Rolf Geyer Managing directors Stephan Raemy Uwe Rechtsteiner Auditors Ernst & Young AG, Berne

12 Annual Report 2020 The family shareholders active in the Liebherr Group

Dr. h.c. Willi Liebherr Dr. h.c. Isolde Liebherr Chairman of the administrative Vice-Chairman of the administrative board of Liebherr-International AG board of Liebherr-International AG

Jan Liebherr Stéfanie Wohlfarth Sophie Albrecht Member of the administrative Member of the administrative Member of the administrative board of Liebherr-International AG board of Liebherr-International AG board of Liebherr-International AG

Patricia Rüf Johanna Platt Philipp Liebherr Member of the administrative Member of the administrative Member of the administrative board of Liebherr-International AG board of Liebherr-International AG board of Liebherr-International AG

From generation to generation

Liebherr is an independent family-run business that is man- product policy, and financial and investment policies. In aged jointly by the second and third generations of the family. addition to the siblings Dr. h.c. Willi Liebherr and Dr. h.c. This continuity as well as a focus on long-term success, Isolde Liebherr, who represent the second generation sustainable development, stability and reliability are the of the Liebherr family, the board includes Jan Liebherr, fundamental principles that guide all management decisions. Stéfanie Wohlfarth, Sophie Albrecht, Patricia Rüf, Johanna Liebherr’s administrative board is composed exclusively Platt and Philipp Liebherr, who represent the third gen- of family members and is the company’s top decision- eration. They ensure that the Group will continue to be making body. It decides on all fundamental policies re- inextricably linked with the Liebherr family and run as an lating to corporate governance, business development, independent family business.

Brief Portrait of the Group 13 The Group’s business model

User value Products and customer segments The Group also offers an exten- The Liebherr Group is a family-owned, Liebherr offers a diverse product sive range of crane models of every independent technology company programme of 13 product segments, system type, load capacity and size that has been synonymous with a which is unique in its scope and class, to be used in the various areas wide range of products and servic- scale, enabling it to shape techno- of application. From all-terrain mobile es in many different technical fields logical advances in many different cranes and telescopic crawler cranes for over 70 years. Liebherr provides industries. Within the Earthmoving to fast-erecting cranes, the products tailored, technologically advanced product segment, Liebherr produces from Liebherr’s Mobile and Crawler and innovative products and services and distributes a broad portfolio of Crane and the Tower Cranes product with real added value to customers hydraulic excavators, crawler tractors segments are used around the world, in many different industries all over and crawler loaders, wheel loaders, offering the right solution for any the world. Thinking ahead with the telescopic handlers as well as mining purpose. necessary foresight, the Group is trucks. already addressing the challenges that The Group is also a full-service provid- customers around the globe will face With its Deep Foundation Machines, er in the Concrete Technology prod- tomorrow. such as piling and drilling rigs and uct segment. Liebherr develops and duty cycle crawler cranes, Liebherr produces truck mixers, mixing plants offers a full spectrum of products to and concrete pumps, rounding out meet the modern industry’s needs. its portfolio with additional products

such as mixing and control systems. Liebherr also offers efficient material measuring equipment and engineering Within the Material Handling Technol- handling solutions with a wide range projects. Liebherr also produces a ogy product segment, Liebherr spe- of products and innovative models vast array of refrigeration and freezing cialises in a vast range of custom-built for use in harbours and in the mari- products for home and commercial products and technologies capable time and offshore industry. Products use, which feature innovative tech- of handling enormous volumes. The from the Maritime Cranes segment nologies and modern designs. In the product programme includes mobile, range from mobile harbour cranes to Components segment, the Group crawler and electric material handling ship and portal cranes as well as port specialises in high-performance machines. In addition to the products equipment. mechanical, hydraulic and electrical specially developed for this purpose, drive and control technology products Liebherr also supplies modified ver- In the Aerospace and Transportation used in a wide range of industries. sions of many models of its construc- Systems product segment, Liebherr Liebherr also operates six luxury tion machines for material handling. offers high-precision components hotels in Ireland, Austria and Germany. and custom-built system solutions The Group’s products and services are For the mining industry, the Group’s for aircraft, rail vehicles and buses. sold through an international network Mining product segment includes The Gear Technology and Automation of its own distribution and sales com- powerful excavators, mining trucks Systems product segment includes panies as well as partners with whom and crawler excavators that perform high-quality gear machines and auto- Liebherr maintains a long-standing under the most extreme conditions. mation systems as well as precision and trusted business relationship.

Employees of the mobile crane final assembly at Liebherr-Werk Ehingen (Germany) Customer relations Because of its extensive expertise to long-term success, sustainable The Group has worked closely with cus- in key technologies, Liebherr has a development, stability and reliabil- tomers and business partners for years high degree of independence when it ity. The Group’s core objective is to or even decades, and is continuously comes to its engineering needs. ensure that profits remain within the expanding its global presence to remain company, where they are reinvested. close to its customers. Liebherr Liebherr has a high equity ratio and is highly committed to responding operates on the principle that the Organisational structure quickly, reliably and flexibly to its Group’s growth should be predomi- The Liebherr Group has a decentral- customers’ wishes. The Group thrives nantly organic, achieved through its ised structure. Its parent company on bundling its vast technical expertise own intrinsic strength. In certain cases, is Liebherr-International AG, which and extensive knowledge from a wide the Group is also open to appropriate exercises executive, coordinating and range of fields and its ability to offer partnerships and joint ventures. controlling functions. Independently customised solutions. Liebherr strives operating divisional parent companies to deliver excellence for its customers, Earnings and cost structure are responsible for the operational while constantly redefining the limits of Liebherr generates revenue through management of the Group’s product what is possible. As a traditional family the sale and rental of products as segments. This means that research business, the Group owes its success well as the provision of services. and development, production, market- to close customer relationships and its In some product segments, the Lieb- ing and sales for individual product strong focus on added value. herr Group benefits from lowering its segments are also decentralised. unit costs by increasing production Country-specific activities are often Key activities volumes. In other segments, however, managed within overarching sales The Liebherr Group develops, produc- the focus lies on developing cus- and service companies. es and distributes innovative prod- tom-built solutions for individual cus- ucts and services and is the driving tomers. In those segments, Liebherr This structure offers multiple advan- force behind many key technologies. focuses on adding value, achieving tages: on the one hand, it ensures a premium value proposition and of- a consistent approach to central Key resources/added value chain fering highly personalised services to corporate issues, while on the other and key partnerships its customers. The Group can create hand, the flat hierarchies within its Liebherr invests heavily in research synergies through its broad product individual product segments allow and development. In this context, the range and mastery of key technolo- Liebherr to respond quickly to the Group also forms partnerships with gies, among other things. Its supply needs of the market, to adapt quickly universities and research institutes chain spans the entire globe. to changes and swiftly put new ideas worldwide. into practice. With its 13 product segments, the Thanks to its network of over 40 Liebherr Group embraces a strate- state-of-the-art production facilities gy of diversification, which helps to in 17 countries and long-standing shield it from economical fluctuations partnerships with suppliers inside and in specific industries or markets. The outside of the Group, Liebherr is able decentralised corporate structure to offer the highest-quality innovative with clearly organised, independently products at competitive prices. The operating business units also pos- business model also includes well-or- itions Liebherr to respond flexibly ganised replacement part logistics to market trends in the competitive and customer-centric services. global economy. Liebherr is dedicated

Real-time and effective assistance through the Liebherr Remote Service App

16 Annual Report 2020

Development and Outlook

18 Annual Report 2020 19 Business Performance The Group in 2020

In 2020, the Liebherr Group was unable to match its record performance from the previous year. Group-wide sales totalled € 10‚341 million, which represents a € 1‚409 million (12.0 %) decline compared to 2019.

North America

‒ 15.5 % € 1,448 m € ‒ 265 m

Central and Africa / South America Near and Middle East

– 32.1 % ‒ 11.4 % € 309 m € 607 m € – 146 m € ‒ 78 m

20 Annual Report 2020 Turnover worldwide € m

Europe % + . + . % + . – . % – .

‒ 11.8 % % + . – . % – . € 6,339 m , € ‒ 847 m , , , ,

European Union Non-EU countries

– 11.7 % ‒ 12.0 % € 5‚085 m € 1,254 m € ‒ 676 m € ‒ 171 m R*

* Restatement first-time adoption of IFRS 9 / 15 / 16

Asia and Oceania

‒ 4.3 % € 1,638 m € ‒ 73 m

Africa / Near and Middle East

‒ 11.4 % € 607 m € ‒ 78 m

Development and Outlook 21 Overall economic performance According to the International Monetary Fund, the global economy shrank by 3.5 % in 2020, less drastically than was assumed at the beginning of the coronavirus pandemic. Industrialised economies shrank by 4.9 %, whilst the economic downturn among emerging and developing nations was far less severe, with a decrease of only 2.4 %. China was the only major economy to achieve modest growth (2.3 %). The US economy shrank by 3.4 % compared with 2019. The pandemic affected the eurozone far more severely, where economic performance dropped by 7.2 % compared with the previous year. The World Trade Organi- sation reported that international trade volume declined by 9.2 %. Around the world, the sale of goods was disrup- ted, in some cases significantly, by nationwide lockdowns, travel restrictions and planning uncertainties caused by the pandemic.

A 1000 EC-H 40 tower crane lifts concrete parts at the Grand Paris construction site in Paris (France)

22 Annual Report 2020

Turnover by product segments

Earthmoving Deep Foundation Machines € 2,008 m (‒ 10.4 %) 258 m (‒ 17.0 %)

Others Material Handling Technology € 51 m (‒ 33.8 %) € 477 m (– 24.2 %)

Mining Components € 964 m (‒ 9.8 %) € 403 m (– 6.3 %) The Liebherr Group 2020 Refrigeration and Freezing € 1,007 m (+ 2.4 %) € 10,341 m (‒ 12.0 %) Mobile and Crawler Cranes € 2,504 m (‒ 4.8 %)

Gear Technology and Automation Systems € 213 m (‒ 12.3 %)

Tower Cranes Aerospace and Transportation Systems € 444 m (‒ 18.5 %) € 1,024 m (‒ 31.3 %)

Maritime Cranes Concrete Technology € 795 m (‒ 10.4 %) € 193 m (‒ 10.2 %)

(variation compared to the previous year in %)

24 Annual Report 2020 Sales performance by product area Sales performance by region Although the global economy had already begun to slow There were significant regional disparities in terms of down modestly towards the end of 2019, Liebherr still sales in 2020. There was a downturn in sales in the Eu- closed out the year with a strong volume of orders which ropean Union, which has traditionally been the Group’s continued into the first quarter of 2020. Starting at the strongest sales region. This was primarily due to declining end of the first quarter, however, the coronavirus pandem- sales in Germany and France; by contrast, business grew in ic began to affect business activities in many markets. Austria and Poland. Sales in non-EU countries fell as well. This also had an impact on the Group’s sales. With the ex- The Group also saw a decline in sales in North America, ception of Refrigeration and Freezing, every product seg- as well as in Central and South America, Africa and the ment experienced a decline in sales. Sales in construction Near and Middle East, all of which reported significantly and mining machines reached € 6,848 million, 10.4 % lower lower sales than the year before. Meanwhile, business was than in the previous year. This includes the Earthmoving, stable throughout the year in Asia and Oceania. This was Material Handling Technology, Deep Foundation Machines, thanks largely to strong demand from China and Australia. Mobile and Crawler Cranes, Tower Cranes, Concrete Tech- nology and Mining product segments. Net result for the year The Liebherr Group achieved net profits of € 7 million in The other product segments, including Maritime Cranes, 2020. The operating result decreased compared to 2019, Aerospace and Transportation Systems, Gear Technology as did the financial result. In view of the year's special and Automation Systems, Refrigeration and Freezing, Com- challenges and difficult conditions, this can nevertheless ponents and Hotels, achieved total sales of € 3,493 million, be considered a success. a 15 % decrease compared to the previous year.

Development and Outlook 25 Employees by regions compared to previous year

North America European Union Non-EU countries 1,757 employees (– 160) 34,751 employees (– 294) 4,721 employees (+ 418)

Central and South America 1,763 employees (– 28)

Africa / Near and Middle East Asia and Oceania 1,033 employees (– 90) 3,900 employees (+ 30)

Employees Employees worldwide The qualifications, enthusiasm and America, Africa, and the Near and commitment of the Group‘s employ- Middle East. ees make a key contribution to its business success. Liebherr’s long- Even during the Coronavirus pandem- term commitment to its employees ic, Liebherr maintained its reputation , , is in keeping with its tradition as a as an attractive employer. For in- , ,

family-owned company. stance, the training programme was , continued despite the economic un- At the end of 2020, the Group certainty. In 2020, 400 new trainees employed 47,925 people world- and apprentices started their careers wide. Despite a notable decline in at Liebherr locations in Germany, sales, the number of employees Austria and Switzerland alone. decreased only slightly by 124, or + + – + , + 0.3 %, compared to the previous , + , + year. The number of employees

rose in Europe, Asia and Oceania. Meanwhile, there was a decrease in the number of Liebherr employees in North America, Central and South

26 Annual Report 2020 Sustainability The Group aspires to generate sustainable value for its employees, customers and suppliers and for society as a whole. As an independent family company with a long-term focus, Liebherr is aware of its responsibilities and is committed to sustainable development. Its products, processes and infrastructure are geared to the minimum possible consumption of resources. The focus in all areas is on safety, efficiency and environmental sustainability. Last year, a large number of the Group’s companies worked on projects looking at social, environmental and economic aspects of sustainability.

Assembly of an overhauled landing gear at the Liebherr-Aerospace facility in Lindenberg (Germany)

Research and development As a high-tech company, Liebherr LR 1200.1 unplugged, as well as Lieb- smart monitoring, in particular, which pursues the goal of making a decisive herr’s first fully electric truck mixers, allows for the monitoring of applianc- contribution to shaping technological the ETM 1005 and the ETM 1205. es with a web-based dashboard in re- progress in sectors relevant to the Liebherr also worked with VA Erzberg search and laboratories, among other Group. Liebherr invested € 512 million to develop a trolley assist system for things. Liebherr’s Refrigeration and in research and development last the T 236 diesel-electric mining truck. Freezing product segment opened a year. The bulk of this was used in the Aircraft manufacturer Aerion chose new location in Ulm (Germany), from development of new products. A large Liebherr as the developer and supplier where the sales and service Germany number of joint research projects with for the air management system of its and digitalisation departments oper- universities, other higher education new AS2 supersonic business jet. One ate. With its start-up atmosphere, the institutions and research institutes of the system’s key components will new Digital Hub is intended to appeal were initiated and continued. be an electrical air conditioning pack, to the digital specialists of the future. which contributes to more efficient Throughout the year 2020, research and greener aircraft operation. Liebherr is a founding member of the and development activities focused Center Construction Robotics project, heavily on the topic of alternative Digitalisation was another focal point which was granted a 10,000 m2 plot drivetrain technologies. The Lieb- of R&D activities. With the help of by RWTH Aachen University in 2020 herr product portfolio now includes the Liebherr Remote Service App, for a model construction site. Here, multiple fully and partially electric a mobile harbour crane of the LHM an interdisciplinary team of scientists machines and components in product 420 type was assembled in Campana from RWTH Aachen will work with segments such as Mobile and Crawler (Argentina) in May – remotely from a consortium of European industry Cranes, Concrete Technology, Mining Germany for the first time ever. Like- leaders to study new construction and Aerospace and Transportation wise, in the Refrigeration and Freez- processes, products, connected ma- Systems. These include the world’s ing product segment, digitalisation chines, robotics and software solu- first battery-powered crawler cranes, accounted for a major proportion of tions as well as new training, working the LR 1250.1 unplugged and the development activities. This included and communications concepts.

Development and Outlook 27 Investments The Group has traditionally emphasised the importance of “Liebherr Tech-Center”, where high-quality automation sys- making regular investments in its production facilities and its tems are tested and demonstrated in a 700 m2 test hall. global distribution and service networks. Last year, the Group invested € 605 million, a decrease of 20 % or € 151 million In the Aerospace and Transportation Systems product seg- compared to last year. Offset against this was depreciation of ment, Liebherr-Transportation Systems (China) Co., Ltd. start- € 543 million. ed operations at its new production site in Pinghu (Zhejiang Province), which develops, produces and services components One focus of investment in the year under review was the and systems for rail transport in China and worldwide. Invest- expansion and modernisation of company locations and the ments were also made in the Components product segment. intensification of Liebherr’s global market presence. To meet demand in the Asian market, a new factory for components is to be built in China. In addition, preparations are under In Panama City Liebherr Panama S.A. began building its new way to begin the assembly of gears in India. headquarters. The company focuses on mining. In Kempten (Germany) Liebherr-Verzahntechnik GmbH opened the

Main bearings are validated on a Liebherr-designed test bench for continuously rotating moment bearings Risk management system and internal control system In order to ensure the sustainable success of the Group, This localised approach also makes it possible to identify opportunities and risks are identified at an early stage to and assess areas of opportunity efficiently. The informa- be evaluated and controlled. The Group has a continually tion gained about market-related and technological devel- optimised risk management procedure in place, and an opments is used in opportunities management to reach internal control system to help it meet operational, mar- decisions about future areas of business and production ket-related and legal requirements. To ensure the integrat- processes. At the corporate level, the current risk situation ed recording, analysis and evaluation of risks, all managers is regularly reviewed and the effectiveness of the systems responsible for the risk management and internal control and processes used is assessed. The internal audit de- systems used in the individual Group companies are partment monitors compliance with Group guidelines and involved. Risks are identified and assessed locally in the the implementation of the risk management and internal individual companies, then countermeasures to limit the control systems. risks are introduced and the impacts are evaluated. Supplementary report Individual opportunities and risks Events of particular significance which occur after the In order to illustrate the individual opportunities and risks, reporting date should be recorded here, together with their similar types of risks and opportunities have been grouped expected impact on the Group’s assets, financial position together. and earnings. The Liebherr Group had no such events to report after the end of the 2020 business year. Overall economic opportunities arise from the aforemen- tioned global recovery of certain industrial sectors. The Outlook: 2021 Liebherr Group is active in many of them, and order intake The International Monetary Fund predicts that the global has already developed favourably across various product economy will grow by 5.5 % in 2021. This reflects the ex- segments in the first quarter of 2021. pectation of a vaccine-driven pick-up in economic activity later in the year along with additional stimulus programmes At the same time, there is still uncertainty about the speed announced in several major economies. of economic recovery, as it is still too early to tell how the pandemic and its macroeconomic impacts will continue to The World Bank is similarly optimistic, predicting a glob- develop. For instance, it is unclear whether international al economic recovery with a growth rate of 4 %, assuming trade will pick up or continue to decline, or whether the that corona vaccinations will become increasingly available economic policies implemented by many governments can throughout the year. In its Global Economic Prospects study prevent debt from spiralling. published in January 2021, the World Bank stressed that this recovery could be endangered if policymakers fail to get the The sections on each of the product segments contain pandemic under control and implement investment-friendly reports on the opportunities and risks relevant to that reforms. division. Specific cost variations due to increasing macroeconomic uncertainty or business cycles that cannot be The World Trade Organisation expects a 7.2 % growth in directly passed on through contractual price indexation global trade in 2021. According to the research network Euro- may pose risks that affect the Group’s performance. construct, global construction volume declined by 7.8 % in Market price risks arise from the operating business, in 2020 due to the coronavirus pandemic. A modest recovery particular due to exchange rate and interest rate fluctua- of 4.1 % is expected in 2021. In general, the construction tions. Liebherr monitors these risks continuously and uses industry is optimistic about the future. Following the heavy appropriate financial instruments to hedge selected trans- setbacks the industry suffered in 2020, the International actions. This means that the Group enters into financial Air Transport Association (IATA) predicts further uncertainty transactions only when they are linked to its operational in 2021. Despite the worldwide launch of vaccination cam- business activity or for hedging purposes. As a matter of paigns, the number of pre-booked flights at the beginning of principle, Liebherr does not engage in transactions of a the year was still 60 % below last year. speculative nature.

In summary, it should be noted that due to the ongoing The global nature of our business activities, together with coronavirus pandemic and the many associated influencing our broadly diversified product base and the risk manage- factors, business development in 2021 will continue to be ment system in place in the Group, ensure that the relevant characterised by uncertainty for some time. However, it can risks are controlled. Based on the currently available infor- be assumed that certain sectors will recover in the course of mation, there are no further identifiable risks which could the year and in part approach the pre-pandemic level. have a substantial detrimental effect on Liebherr’s assets, financial position and earnings in the 2021 business year and threaten the continuity of the Group as a whole.

30 Annual Report 2020 Investments € m Depreciation € m + . % . + + . % . + + . % + . % . + + . % . + – . % . – + . % . + + . % . + . % . – . % – ** ** ** ** ** ** ** ** ** ** * *

* Restatement first-time adoption of IFRS 9 / 15 / 16 ** Of which, rental fleet

Development and Outlook 31 04

Reports on the Product Segments

Earthmoving...... 34 Material Handling Technology...... 36 Deep Foundation Machines...... 38

Mining...... 40 Mobile and Crawler Cranes...... 42 Tower Cranes...... 44 Concrete Technology...... 46 Maritime Cranes...... 48 Aerospace and Transportation Systems...... 50 Gear Technology and Automation Systems...... 52 Refrigeration and Freezing...... 54 Components...... 56

32 Annual Report 2020 Earthmoving...... 34 Material Handling Technology...... 36 Deep Foundation Machines...... 38

33 Earthmoving

Liebherr’s Earthmoving product segment posted sales of € 2,008 million in 2020, representing a € 232 million or 10.4 % decrease compared with the year before.

UK market share stable despite Brexit New products, digitalisation and sustainability The coronavirus pandemic dominated the global markets Liebherr launched several new earthmoving machines and during the reporting year, and its effects were apparent in technologies in 2020, including the first telescopic wheel nearly every market. The USA were particularly affected. In loader, L 509 Tele. This versatile machine combines the Europe, sales dropped significantly across the sector, with lifting capacity and reach of a standard telescopic wheel results varying from one country to another. loader with the handling capacity of a classic wheel loader. A highlight of the year was the world premiere of the new TA The Earthmoving product segment performed in line with 230 Litronic articulated dump truck in October, which was these developments and experienced a downturn in sales in unveiled in a dedicated online live stream. all regions. In the European Union, sales fell in France, Spain and Sweden, although the slowdown was not as pronounced Liebherr is working systematically on various digitalisation in Germany, enabling Liebherr to maintain or even increase and sustainability projects. This includes a strategic part- its market share. In the non-EU countries, the UK remained nership with Leica Geosystems, which was announced at the stable throughout the reporting period despite the ongo- Conexpo trade show (USA). Through this partnership, 2D and ing Brexit negotiations. However, sales were down on the 3D machine control systems will be installed into Liebherr’s previous year in Switzerland and Norway. Russia developed sixth and eighth generation mobile and crawler cranes on favourably. In North America, growth slowed in the USA and an ex-works basis. Moreover, new assistance systems were Canada. In the Near and Middle East, sales continued on a introduced for generation 8 crawler excavators. The stead- positive trajectory, especially in Saudi Arabia. In Asia and ily growing Reman programme, which focuses on extensive Oceania, sales in Australia were significantly lower than in recycling and subsequent reprocessing of components, the previous year; India, however, recorded positive growth. contributes to the circular economy. Turnover by sales regions

North America European Non-EU countries 8.7 % Union 13.7 % 66.7 %

Asia and Oceania 4.8 %

Central and Africa / Near and South America Middle East 2.2 % 3.9 %

Despite the continuing uncertainty caused by the coro- Turnover € m navirus pandemic, Liebherr expects to achieve a notable increase in sales in the Earthmoving product segment in 2021. Upcoming government infrastructure programmes, – . % , which focus for example on energy supply and e-mobility, are a reason for optimism. ,

Investments € m*

– . %

Employees* “The launch of the new generation of articulated dump trucks now positions – . % , Liebherr as a full-line supplier in the earthmoving area.” ,

* Includes Earthmoving and Material Handling Technology

Reports on the Product Segments 35 Material Handling Technology

Revenue generated by Liebherr’s Material Handling Technology product segment amounted to € 477 million in 2020, representing a € 152 million or 24.2 % decrease compared with the previous year.

Decline in sales in key markets Switzerland. The North America region was also affected, A downturn in the global material handling technology mar- with the USA showing a significant drop in revenue and ket was already evident at the beginning of 2020. However, Canada reporting a moderate decline. At the same time, the situation was further exacerbated by the coronavirus the results from Asia and Oceania were very positive, with pandemic and its negative impact on the global commodi- growth recorded in Australia, Indonesia and Japan. The ties sector. The material handling market collapsed by as product segment also performed well in Central and South much as 50% in some key regions and countries such as America, driven primarily by growth in Brazil. Western Europe, North America and Russia. World premiere of new all-round wheel loaders The effects of this were also felt at Liebherr. Sales were The year 2020 was characterised by product innovation in down in the European Union, primarily in Finland, Spain and the Material Handling Technology product segment. This Germany, although Austria posted an increase. In non-EU included the world premiere of Liebherr’s new mid-range countries, sales growth was favourable in Turkey and wheel loaders. The L 526, L 538 and L 546 all-round wheel Norway, but there was a decline in sales in Russia and loaders can now be fitted with the “parallel kinematics”

“Numerous machines were converted to comply with the EU’s Stage V emissions regulation, and the availability of electric drive concepts was further expanded.” Turnover by sales regions

North America European Non-EU countries 19.5 % Union 22.2 % 46.8 %

Asia and Oceania 7.3 %

Central and Africa / Near and South America Middle East 2.9 % 1.3 %

industrial lift arm variants, which boast very high holding Turnover in € m forces in the upper areas as well as parallel guidance. For the material handling machines LH 22 to LH 35 Industry Litronic, new equipment combinations were developed – . % to provide even greater ranges when performing tasks in the arboricultural and timber industries.

The existing product portfolio was continually expanded Investments € m* to meet market and legislative requirements. Numerous machines were converted to comply with the EU’s Stage V emissions regulation, and the availability of electric dri- – . % ve concepts was further expanded. The product segment also plays an important part in resource conservation by continuing to recycle and reprocess used components as part of the Liebherr Reman programme. Employees*

At present, it is difficult to make accurate projections about the future performance of the Material Handling – . % , Technology product segment. Current developments give reason for modest optimism and suggest that there may , be an upturn in the important markets in 2021. * Includes Earthmoving and Material Handling Technology

Reports on the Product Segments 37 Deep Foundation Machines

Liebherr’s Deep Foundation Machines product segment posted sales of € 258 million in the 2020 financial year. This represents a € 53 million or 17.0 % decrease compared with the year before.

Global market leader in duty cycle crawler cranes bigger declines in the European Union, most notably in Ger- 2020 saw a decline in the deep foundation machines sector. many and France. Business also declined in Asia and Oceania, This applied in particular to piling and drilling rigs, although Africa and the Near and Middle East, and Central America and the downturn was less pronounced for duty cycle crawler South America. cranes. In general, the industry had to operate in a challenged market. In spite of this, Liebherr managed to maintain a stable A success story continues market share in the deep foundation engineering sector and Liebherr launched a number of new products in the Deep could hold its position as a global market leader in duty cycle Foundation Machines product segment, with most of the crawlers. launches taking place online for the first time. The unveiling of the new LRB 23 piling and drilling rig builds on previous Liebherr recorded a significant increase in sales in North successes in this product segment. The compact all-rounder America, the most important sales region for this product model boasts a power output of 600 kW and a safety-en- segment. This was driven by favourable growth in the USA. hancing assistance system. The HS 8070.1 was the first new Sales revenues from non-EU countries increased, growth was generation duty cycle crawler crane to be unveiled. With a recorded in Turkey compared to the previous year. There were load capacity of 70 tonnes it offers a transport option that

“In future, construction machinery will be part of a digital world – this is why Liebherr continues to improve the digital integration of machines.” Turnover by sales regions

North America European Non-EU countries 32.6 % Union 14.3 % 35.3 %

Asia and Oceania 12.4 %

Central and Africa / Near and South America Middle East 0.4 % 5.0 %

enables a transport weight of less than 35 tonnes thanks Turnover in € m to self-dismantling. Noise emissions and fuel consumption were lowered significantly. – . % Besides the development of various assistance systems, predictive maintenance and electrification were two further focal points of research. The MyJobsite service provided a major contribution to the digital integration of Investments in € m deep foundation machines. This digital tool documents and merges data on various machines and their surround- ings. The data is then used to generate reports on quality, – . % performance, costs and safety, assisting machine operators and fleet managers to reach the right decisions as they carry out their work. Over the reporting period, the product segment invested primarily in real estate as well Employees as business and operational equipment.

Liebherr expects to achieve a noticeable increase in sales – . % in the Deep Foundation Machines product segment in 2021.

Reports on the Product Segments 39 Mining

In the Mining product segment, Liebherr achieved revenues of € 964 million, which means a decrease in sales by € 105 million, or 9.8 %, compared to the previous year.

Industry’s resilience proves advantageous T 236 truck goes trolley Despite the industry’s usual resilience, the global mining Liebherr reached important milestones in the course of 2020. industry experienced a downturn in 2020. This resulted in The crawler tractor business delivered the 100th unit. Liebherr losses in revenue and profits in the resources industry. It, also celebrated the production of the 1,000th mining excava- however, also made the industry focus on future-looking tor from the manufacturing facility in Colmar (France). trends, such as increased digitalisation autonomy, and automation. Research and development remained of high importance. New Tier 4 engine configurations were introduced for the PR 776 The development of revenues in the mining product segment crawler tractor and for the R 9100B, R 9150B and R 9800 exca- mirrored that of the global market. Business in the core vators, to match new emissions regulations standards. A new region of Asia and Oceania remained stable, driven by the digital product suite, “Operational Excellence”, was introduced strong Australian market as well as Mongolia. Developments in the first ultra-class excavator model including truck loading in Africa and the Near and Middle East were positive. The assistant, performance monitoring, application severity and non-EU countries witnessed a decrease, following a decline operational conformance features. The mining equipment in sales in Russia. Sales in North America and Central and portfolio also grew to include the HS 8300 dragline, one of South America went down. which is already in operation in Brazil.

A highlight was the commissioning of the T 236 diesel-electric truck at the VA Erzberg iron ore mine (Austria). When connected Turnover by sales regions

North America European Non-EU countries 4.9 % Union 7.1 % 1.9 %

Asia and Oceania 60.8 %

Central and Africa / Near and South America Middle East 9.2 % 16.1 %

to the overhead power lines in trolley mode, the full power Turnover in € m capacity of the electric wheel motors of the T 236 can be translated into speed on grade while the diesel engine idles, thus reducing emissions and fuel consumption. The first – . % , D9816 engine retrofit option will be commissioned in 2021 on a T 284 mining truck. The mining truck business also developed a new 305 tonne truck, the T 274. Investments in € m For 2021, Liebherr expects the mining industry to recover. Major technology trends such as digitalisation, autonomy and zero emissions will be a focus of research and develop- + . % ment activities.

“Thanks to its decentralised network of Employees suppliers, warehouses and Reman cen- tres, Liebherr customers have enjoyed – . % , a high level of availability of parts and services throughout the year.” ,

Reports on the Product Segments 41 Mobile and Crawler Cranes

Revenue generated by the Mobile and Crawler Cranes product segment amounts to € 2,504 million in 2020, representing a decrease of € 127 million or 4.8 % compared with the previous year.

Liebherr with high market share remained stable and there was significant growth in South There was a slight slowdown in growth in the global mobile Korea in particular. crane market in 2020, which also created some sideways movement in the crawler cranes market. Demand for tel- Maximum lifting capacity on four axles and Local Zero Emissions escopic and crawler cranes grew to the many economic Liebherr successfully presented a number of new products stimulus packages that were implemented around the world online in 2020. This includes the new LTM 1150-5.3 telescopic as well as due to the resurgence of the wind power sector, crane, which has a maximum load capacity of 150 tonnes and especially in Europe. Liebherr was able to maintain its share features a 66-metre telescopic boom. Among the other prod- of over 50 % in the global telescopic crane market. It also uct launches were two of the first battery-powered crawler ranks among the top three manufacturers of crawler cranes. cranes in the world – the LR 1200.1 unplugged and the LR 1250.1 unplugged. The two cranes match the performance of Despite continuing difficulties across the sector, sales con- conventional models whilst featuring electric motors and ful- tinued on a positive trajectory, but were slightly below the filling the requirements of the Local Zero Emissions concept. previous year. In the product segment’s key markets, the Eu- They do not produce any emissions, generate considerably ropean Union region grew due slightly with highly favourable less noise and are CO2-neutral when powered by sustainably results in Germany. Sales in the non-EU countries and North generated electricity. Approximately 750,000 people attend- America declined. Sales in Central and South America took a ed these two online product launches. downturn, and there was a slight slowdown in growth in the Near and Middle East, although strong growth was recorded Liebherr also set new standards in cost-effectiveness and in the United Arab Emirates. The Asia and Oceania region performance with the LTM 1120-4.1, the most powerful 4-axle Turnover by sales regions

North America European Non-EU countries 23.6 % Union 8.4 % 45.8 %

Asia and Oceania 14.7 %

Central and Africa / Near and South America Middle East 1.8 % 5.7 %

mobile crane on the market. Thanks to its 66-metre boom Turnover in € m and high lifting capacity of 120 tonnes, it can handle operations that previously could only be carried out by a 5-axle mobile crane. Research and development efforts sought to – . % , continuously optimise the product portfolio and to increase customer value. In terms of investment, the product segment , focused primarily on infrastructure and logistics. Investments in € m In view of the good order situation and the anticipated implementation of economic stimulus packages, Liebherr envisages that sales in the Mobile and Crawler Crane prod- + . % uct segment will return to 2019 levels in 2021.

“The previous financial year saw the Employees arrival of many product developments which set new standards in terms of + . % , performance, cost-effectiveness and environmental sustainability.” ,

Reports on the Product Segments 43 Tower Cranes

Revenue generated by the Tower Cranes product segment in 2020 amounted to € 444 million, representing a € 101 million decrease or 18.5 % compared with the previous year.

Push for growth in the USA Development focus “Construction Site of the Future” The global construction industry experienced a downturn in Following the launch of the new EC-B cranes in 2019, out of all markets, except for China. which three models were fitted with the new fibre rope, the first fibre rope cranes were successfully commissioned in Sales in Liebherr’s Tower Cranes product segment in 2020 2020. Another highlight was the product segment’s invol- consequently fell below the previous year’s figures, with a vement in the construction of the three-towered LYFE busi- particularly sharp fall in the EU, the segment’s most import- ness complex in the Bnei Brak industrial zone (Israel). Wor- ant sales region. Among the non-EU countries, Switzerland king on this construction project, which began in 2018, are saw the highest increase in sales. Business also performed six external climbing Liebherr 190 HC-L 8/16 Litronic luffing very positively in North America, Africa and the Near and tower cranes and a Liebherr high-top 280 EC-H 16 Litronic. Middle East, driven by growth in the USA and Algeria. Sales declined in Central and South America, Asia and Oceania. “The Construction Site of the Future” was a top research priority in the segment in 2020. Liebherr is a founding member of the Center Construction Robotics project, which was presented with an area of 10,000 m2 to serve as a model

“An interdisciplinary team of scientists at RWTH Aachen is working alongside a consortium of European companies to develop the ‘Construction Site of the Future’ under real conditions.” Turnover by sales regions

North America European Non-EU countries 6.3 % Union 13.7 % 68.0 %

Asia and Oceania 5.0 %

Central and Africa / Near and South America Middle East 1.1 % 5.9 %

construction site by the RWTH Aachen University in 2020. Turnover in € m An interdisciplinary team of scientists at RWTH Aachen is working alongside a consortium of European companies to develop the construction site of the future under real – . % conditions. New construction processes and products, networked machines, the use of robots, software solutions as well as teaching, working and communication concepts are put to the test. The segment is also working Investments in € m on alternative drive concepts for mobile cranes.

Liebherr is cautiously optimistic about the year ahead and + . % anticipates a slight increase in sales in the Tower Cranes product segment.

Employees

– . % ,

Reports on the Product Segments 45 Concrete Technology

The Concrete Technology product segment recorded sales revenues of € 193 million for 2020. This represents a € 22 million or 10.2 % decrease compared with the year before.

Growth halted in the concrete sector Machinery and services of the future The stable growth that the concrete industry had seen in re- One of Liebherr’s objectives is to become a full-service sys- cent years, was dampened in 2020. This was partially due to tem supplier of concrete technology. As a result, research and the disruption of supply chains caused by trade restrictions development activities have focused on the machines and and bans imposed across international borders. services of the future. In 2020, the first pre-series vehicles in the newly developed ETM range were delivered to custom- Liebherr’s sales declined in almost all regions in the report- ers in Europe. In actual use, the truck mixers with electric ing period, although Africa and the Middle East were notable drum drive show a savings potential of 30 % in both diesel exceptions. Significant growth was recorded here, partly due consumption and CO2 emissions. Orders have already been to the continually strong performance in Saudi Arabia. The received for 2021. The first fully electric truck mixers were European Union experienced a slight decrease, with Germa- also delivered to customers. The transport vehicles are also ny and France growing. In the non-EU countries and North all-electric. Each year, 130 tonnes of CO2 can be saved per America, the decrease was more pronounced. Sales across truck when powered by electricity from renewable sources. the other sales regions of the world declined moderately. Another highlight of the year was the market launch of Lieb- herr’s new self-service concrete plant. It gives building material suppliers a uniquely flexible option for supplying their customers, such as small professional buyers or DIYers. Due to the adjustable concrete discharge, the concrete can be collected by anything from small trailers to large truck mix- Turnover by sales regions

North America European Non-EU countries 3.1 % Union 14.5 % 50.8 %

Asia and Oceania 13.0 %

Central and Africa / Near and South America Middle East 6.2 % 12.4 %

ers. Numerous features were added to the Liebherr BCS II Turnover in € m control system for this purpose. The customer can specify the quantity and quality of concrete required in advance and generate a QR code to start the mixing process. The – . % pick-up terminal is also easy to operate, making it ideal for customers picking up small quantities of concrete.

For 2021 a moderate recovery of business activities is to Investments in € m be expected and with it an increase in new orders which will remain slightly below pre-pandemic levels. – . %

Employees “With the ETM series and the fully electric truck mixer, Liebherr is actively + . % , helping to reduce CO2 emissions in its truck mixer fleets.” ,

Reports on the Product Segments 47 Maritime Cranes

The Maritime Cranes product segment recorded sales revenues of € 795 million for 2020, representing a € 92 million or 10.4 % decline compared with the year before.

Global market leader in mobile harbour cranes and New Zealand developed well in particular. In the European The economic uncertainty also impacted the world market Union, sales were below the previous year’s level. This down- for maritime material handling equipment. The sector had to ward trend also extended to North America, Africa and the face many challenges, including restrictions on the flow of Near and Middle East, and Central and South America. goods, as well as periodic disruptions in transport networks and supply chains. Driving forward digitalisation Despite global travel restrictions, Liebherr successfully put In spite of this, Liebherr was able to maintain its position as numerous new cranes into operation throughout the year. A world market leader in mobile harbour cranes. In the area particular highlight was the assembly of an LHM 420 mobile of port equipment, a year-on-year sales growth in non-EU harbour crane in Campana (Argentina) in May. It was the first countries was achieved. The product segments’ key market, time that Liebherr service technicians assembled a crane re- the EU, remained stable. While demand for reachstackers motely from Germany using the new Liebherr Remote Service and ship cranes declined significantly, demand for offshore app. All customers had free access to the app until the end cranes was slightly above the previous year. of 2020 as part of the extended test phase. The first external loading of monopiles for offshore wind turbines by the Growth varied among the Maritime Cranes product segment’s Liebherr portal crane TCC 78000 in the international port of various sales regions during the reporting period. Significant Rostock (Germany) was another highlight. growth was achieved in non-EU countries, particularly in Rus- sia. Strong growth was recorded in Asia and Oceania, Australia Digitalisation topics were the fundamental research and Turnover by sales regions

North America European Non-EU countries 9.6 % Union 19.4 % 29.8 %

Asia and Oceania 18.0 %

Central and Africa / Near and South America Middle East 6.3 % 16.9 %

development focus throughout the reporting period. Work Turnover in € m continued on assistance systems as well as on research into semi-autonomous cranes, with a focus on automated bulk material and container handling. The close collabora- – . % tion with international universities and research institutes, such as ETH Zurich (Switzerland) and the Technical Univer- sity (TU) of Dresden (Germany), was continued. Investments in € m Despite the challenging market conditions in the maritime sector, Liebherr remains optimistic that the Maritime Cranes product segment will develop positively in the – . % current financial year.

“The Liebherr Remote Service app is a Employees service tool that uses visual information to support customers more effectively – . % , and helps them to avoid unnecessary downtimes.” ,

Reports on the Product Segments 49 Aerospace and Transportation Systems

The Aerospace and Transportation Systems product segment achieved sales of € 1,024 million, which represents a decrease of € 466 million, or 31.3 % compared to the previous year.

Global market situation impacts performance ed air management system for the new US-American AS2 The world experienced an abrupt decline in air traffic and to supersonic business jet. Furthermore, Liebherr systems and a lesser extent in railway traffic, generating serious conse- components entered into service on board Airbus’ extra-large quences for operators, aircraft and railway vehicle manufac- transport aircraft, the BelugaXL. The landing gear overhaul turers as well as for their suppliers. This also interrupted the acquisition campaign was also fruitful. Contracts for the product segment’s steady growth of the last years. overhaul of Embraer E-Jet E1 landing gears were signed with several airlines. The Asia-Pacific aerospace market initially suffered but recovered during the year. The domestic market in China re- Liebherr enlarged its footprint in the automotive sector. Its covered to its pre-pandemic level in October 2020. The region fuel cell air compressors are built into the new seven-seater Africa and the Near and Middle East saw a decline in sales. In SAIC’s Maxus EUNIQ 7 car, as well as into hydrogen-pow- the European Union, the non-EU countries and the Americas, ered shuttle buses in China. The product segment entered sales dropped considerably, and recovery will take time. space travel as a new market. Together with a partner and the French Centre National d’Etudes Spatiales it will develop Working on the transportation of the future thermal management capabilities for evaporators and con- Liebherr supplies major systems and components, including densers for a mechanically pumped loop cooling system for the folding wing tip system, the first of its kind integrated in the next generation of telecommunication satellites. Within a civil aircraft, for the new Boeing 777X aircraft, which had the European research project Safe4RAIL-2, Liebherr worked its maiden flight in 2020. The all-new business jet Gulfstream intensively with seven consortium partners on the devel- G700™ also took off with Liebherr’s pneumatic component opment of the next generation Train Control and Monitoring package for Rolls Royce’s Pearl 700 engine on board. Lieb- System (TCMS). In August, the Liebherr-Transportation Sys- herr was also selected to develop and supply the integrat- tems (China) Co., Ltd. production site was opened in Pinghu

North America European Non-EU countries 20.5 % Union 11.6 % 50.6 %

Asia and Oceania 13.1 %

Central and Africa / Near and South America Middle East 2.5 % 1.7 %

(Zhejiang province), which develops, produces and servic- Turnover in € m es components and systems for rail transport in China and worldwide. – . % , Liebherr anticipates a recovery period of several years for civil aviation and the aftermarket. For transportation , systems, continuous growth in the automotive industry is expected, especially in China. Investments in € m

– . %

“In addition to the current crisis, aviation and the railway industry are facing major Employees challenges with regard to climate-neutral travelling. New demands will be – . % , levied on the suppliers and Liebherr must prepare for them.” ,

Reports on the Product Segments 51 Gear Technology and Automation Systems

Revenue generated by the Gear Technology and Automation Systems product segment amounted to € 213 million in 2020, representing a € 30 million or 12.3 % decrease year-on-year.

Germany remains the largest market Focus on electro mobility The already shrinking order intake and revenues of the Liebherr was able to present a number of new products in the machine tool industry developed negatively in the financial Gear Technology and Automation Systems product segment year. According to the German Machine Builder’s Association in the 2020 business year. During a virtual trade show, the (VDW), international orders in particular fell sharply com- gear technology product area showcased the high-precision pared with the previous year. Liebherr saw a decline in sales LGG 500 gear-grinding machine that was developed for high of gear cutting machines and tools, which is in line with the precision and top performance in heavy-duty applications. situation across the sector as a whole. Sales remained stable Another novelty was the new standardised SECLA clamping in the automation systems area, with non-EU countries system, Liebherr’s own solution for quality combined with seeing growth, primarily driven by Switzerland and Turkey. short delivery times. In the automation product area, the Growth declined in the European Union. Revenues fell slightly spotlight was on the PHS all-round pallet handling system, in North America due to a weaker US market, with similar de- designed for automated solutions from lot size one. Anoth- velopments in Central and South America. Asia and Oceania er highlight was the modular product kit for battery pack remained just below the previous year’s level. assembly, which is especially suited for high weight battery packs. This process solution includes linear and area gan- tries, storage solutions, (automated) transportation and conveyor systems as well as industrial robotics.

Research activities were carried out to develop uniform data interfaces for production facilities among other things. Turnover by sales regions

North America European Non-EU countries 16.0 % Union 6.1 % 46.5 %

Asia and Oceania 30.5 %

Central and Africa / Near and South America Middle East 0.9 % 0.0 %

Projects under development included the new LHStation Turnover in € m control station and the LHMobile handheld terminal, which facilitates mobile programming and operation. Other development activities focused on automated e-mobility – . % solutions. Investments were made in the maintenance of production sites and in a skiving machine for shaper cutters and hob cutters. Investments in € m Liebherr expects order volumes to pick up in 2021 in the Gear Technology and Automation Systems product segment. Sales are predicted to be on a par with the previous . % year.

“Development projects automation Employees focus on e-mobility. The aim is to develop process solutions for battery – . % , pack assembly and, above all, to serve technological requirements.” ,

Reports on the Product Segments 53 Refrigeration and Freezing

Liebherr’s Refrigeration and Freezing product segment posted sales of € 1,007 million in the 2020 financial year. This corresponds to an increase of € 24 million or 2.4 % year-on-year.

Demand in Europe remains stable World premieres and the “Digital Hub” The global market for large home appliances saw a slight In 2020, Liebherr unveiled an array of new technologies and overall decline in the reporting year. In spite of this, sales of products at the world’s largest kitchen trade show, “Küchen- Liebherr refrigerators and freezers were up on the previous meile”. The new generation of integrated refrigerators and year’s level. Demand for appliances for private households freezers was showcased at the show under the product increased slightly, especially due to the growth in demand for line “Fully Integrated”. The global debut of the new Bio- freezers. In the commercial sector, demand was down due to Fresh feature “HydroBreeze” was a highlight. The innovative a lack of investment readiness. Meanwhile, demand from the technology produces a cold fresh mist every few seconds laboratory services sector increased. when the door is open so food stays fresh even longer. This concept was inspired by nature and is based on a weather The Refrigeration and Freezing product segment achieved phenomenon that occurs on the west coast of America in a growth in Europe, with particularly favourable results in Ger- fertile valley surrounded by desert. Furthermore, the Group many, the Netherlands, Austria and Russia. However, there launched its first ultra-low-temperature freezers, which are was a slight decrease in sales in Africa and the Near and specially designed to be used in research laboratories to Middle East. There was also a decline in Asia and Oceania, for store samples and vaccines. example in India. On the other hand, the results from China were highly positive. Sales also declined, in some cases A significant amount of the development work over the significantly, in North America, Central America and South reporting year was devoted to digitalisation, with smart America. monitoring a key area of focus. Investment was primarily directed at the production facilities and modernisation of the Turnover by sales regions

North America European Non-EU countries 2.5 % Union 15.3 % 74.9 %

Asia and Oceania 6.2 %

Central and Africa / Near and South America Middle East 0.1 % 1.0 %

online store and configuration tool. In October 2020, the Turnover in € m new office building for Liebherr-Hausgeräte Vertriebs und Service GmbH was opened in Ulm (Germany) after one year of construction. It is also the home of the global digitali- + . % sation team, the “Digital Hub”. The team is responsible for driving forward a range of future-focused digital projects. ,

Liebherr expects to achieve moderate growth in sales in Investments in € m the Refrigeration and Freezing product segment in 2021.

– . %

“The close collaboration between the Employees ‘Digital Hub’ and the sales and service department allows Liebherr to respond + . % , even more effectively to market changes and changing customer needs.” ,

Reports on the Product Segments 55 Components

Liebherr’s Components product segment, which produces individual components and system solutions for mobile and stationary machinery, recorded sales of € 403 million in 2020, which corresponds to a € 27 million or 6.3 % decrease compared with the year before.

Favourable growth in Asia Innovating and helping to shape megatrends Sales in the Components product segment fell slightly in The product segment is actively helping to shape megatrends 2020. This mainly affected combustion engines used in de- such as digitalisation and connectivity through the devel- centralised energy systems and the agriculture and forestry opment of its own Internet of Things (IoT) solutions and by sectors in Europe. establishing strategic partnerships. In addition to the various services provided by the Test Centre for Electronics, By contrast, Asia saw a significant increase in sales, primarily Liebherr also offers electronic manufacturing services driven by the high demand in the wind energy sector. A key (EMS) to its customers. The new SMD manufacturing testing highlight was the delivery of 600 main bearings to a leading system and the implementation of new test concepts have OEM to be used in the manufacture of wind turbines with a produced quality improvements and reduced lead times in capacity of 4 MW. The components were delivered just under electronic component manufacturing. a year after production of the parts began. Liebherr also received a sizeable order to provide azimuth thrusters for Innovative hydraulic cylinder solutions for mobile cranes gondola drives on wind turbines. The thrusters were man- were also a standout feature of the year. The grant of a new ufactured in the Liebherr plant in Dalian, China. In addition, patent enabled Liebherr to implement a cylinder piston de- Liebherr main bearings were used in large tunnel construc- sign, which allows for the production of a hybrid version with tion projects all around the world. A future-oriented highlight carbon fibre reinforced plastic (CFRP). New simulators were on the way to low-emissions navigation was the serial de- also fitted with the friction-optimised cylinder solutions. For livery of what is currently the world’s largest worm slewing the first time, the Liduro frequency converter system was drive unit for sail hybrid drives. designed as a complete control system with integrated LES 300 energy storage for use with fuel cells. Furthermore, the development of alternative injection concepts to be used for green hydrogen and synthetic fuels began. Turnover by sales regions

North America European Non-EU countries 19.6 % Union 2.2 % 56.3 %

Asia and Oceania 16.9 %

Central and Africa / Near and South America Middle East 5.0 % 0.0 %

Turnover in € m Work on a new components plant began in China to meet demand from the Asian market. In addition, preparations for gearbox assembly in India were initiated. Liebherr is also – . % using new manufacturing technologies and equipment to continue rolling out the production of slewing bearings for high-output onshore and offshore wind turbines. Investments in € m The product segment anticipates an upturn in future sales, partially due to a new partnership agreement on the supply of V12 gas engines for a prestigious global power company. – . %

“Projects implemented in 2020 and Employees upcoming projects boost our product segment’s global presence and focus – . % , on forward-looking, environmentally friendly technologies and solutions.” ,

Reports on the Product Segments 57 05

Group Companies

58 Annual Report 2020 59 The Group Summary of Group Companies

Europe

Austria Denmark Hotel Löwen Schruns GmbH Liebherr-Danmark ApS Schruns Hedensted Interalpen-Hotel Tyrol GmbH Telfs Finland Liebherr-Hausgeräte Lienz GmbH Liebherr-Finland Oy Ab Lienz Helsinki Liebherr-International Austria GmbH Bischofshofen France Liebherr-MCCtec GmbH Liebherr-Aerospace Toulouse SAS Nenzing Toulouse Liebherr Österreich Vertriebs- und Service GmbH Liebherr-Aerospace & Transportation SAS Bischofshofen Toulouse Liebherr-Transportation Systems GmbH Liebherr-Components Colmar SAS Korneuburg Colmar Liebherr-Transportation Systems GmbH & Co KG Liebherr-France SAS Korneuburg Colmar Liebherr-Werk Bischofshofen GmbH Liebherr-Grues à Tour SAS Bischofshofen Niederhergheim Liebherr-Werk Nenzing GmbH Liebherr-Grues Mobiles SAS Nenzing Niederhergheim Liebherr-Werk Telfs GmbH Liebherr-Location France SAS Telfs Niederhergheim Liebherr-Malaxage & Techniques SAS Azerbaijan Niederhergheim Liebherr-Azeri LLC Liebherr-Mining Equipment Colmar SAS Baku Colmar Liebherr-Mining Equipment SAS Bulgaria Colmar Liebherr-Hausgeräte Marica EOOD Liebherr-Nenzing Equipements SAS Radinovo Niederhergheim Liebherr-Transportation Systems Marica EOOD Société de l’Aéroport de Colmar SAS Radinovo Colmar

Czech Republic Liebherr-Stavební stroje CZ s.r. o. Brno

60 Annual Report 2020 Liebherr-IT Services GmbH Germany Kirchdorf an der Iller Hans Liebherr-Hilfe e. V. Liebherr-Logistics GmbH Biberach an der Riss Kirchdorf an der Iller Liebherr-Aerospace Lindenberg GmbH Liebherr-MCCtec Rostock GmbH Lindenberg Rostock Liebherr-Aviation GmbH Liebherr-MCCtec Vertriebs- und Service GmbH Biberach an der Riss Hamburg Liebherr-Baumaschinen Vertriebs- und Service GmbH Liebherr-Mietpartner GmbH Kirchdorf an der Iller Ludwigshafen am Rhein Liebherr-CMCtec GmbH Liebherr-Mischtechnik GmbH Biberach an der Riss Bad Schussenried Liebherr-Components GmbH Liebherr-Purchasing Services GmbH Biberach an der Riss Biberach an der Riss Liebherr-Components Biberach GmbH Liebherr-Transportation Systems Mannheim GmbH Biberach an der Riss Mannheim Liebherr-Components Deggendorf GmbH Liebherr-Verzahntechnik GmbH Deggendorf Kempten Liebherr-Components Kirchdorf GmbH Liebherr-Werk Biberach GmbH Kirchdorf an der Iller Biberach an der Riss Liebherr-Elektronik GmbH Liebherr-Werk Ehingen GmbH Lindau Ehingen (Donau) Liebherr-EMtec GmbH Liebherr-Wohnungsbau GmbH Kirchdorf an der Iller Kirchdorf an der Iller Liebherr-Ettlingen GmbH Ettlingen Hungary Liebherr-Hausgeräte GmbH Liebherr-Építöipari Gépek Magyarország Kft. Ochsenhausen Györ Liebherr-Hausgeräte Ochsenhausen GmbH Ochsenhausen Ireland Liebherr-Hausgeräte Killarney Hotels Ltd. Vertriebs- und Service GmbH Killarney Ochsenhausen Liebherr-Construction Equipment Ireland Limited Liebherr-Hydraulikbagger GmbH Rathcoole Kirchdorf an der Iller Liebherr Container Cranes Ltd. Liebherr-International Deutschland GmbH Killarney Biberach an der Riss

Group Companies 61 Europe

Italy Sweden Liebherr-EMtec Italia S. p. A. Liebherr-Sverige AB Lallio Västerås Liebherr-Italia S.p.A. Monfalcone Switzerland Liebherr-Utensili s. r. l. Eglesia AG Collegno Bulle Liebherr-Baumaschinen AG The Netherlands Reiden Liebherr-Maritime Benelux B. V. Liebherr-Components AG Amersfoort Nussbaumen Liebherr-Nederland B. V. Liebherr-Component Technologies AG Amersfoort Bulle Liebherr-Export AG Norway Nussbaumen Liebherr-Norge AS Liebherr-Hotels AG Ingeberg Bulle Liebherr-Industrieanlagen AG Poland Bulle Liebherr-Polska sp. z o. o. Liebherr-International AG Ruda Śląska Bulle Liebherr-Intertrading AG Portugal Bulle Liebherr Portugal, Lda. Liebherr Machines Bulle SA Venda do Pinheiro Bulle Mariso Bulle S. A. Romania Bulle Liebherr-Romania S. R. L. Bucarest Spain Liebherr Iberica, S. L. Russia Azuqueca de Henares Liebherr-Aerospace Nizhny Novgorod OOO Liebherr Industrias Metálicas, S. A. Nizhny Novgorod Pamplona Liebherr-Aerospace Russland OOO Moscow Turkey Liebherr Financial Services OOO Liebherr Makine Ticaret Servis Limited Şirketi Moscow Istanbul Liebherr-Nizhny Novgorod OOO Nizhny Novgorod Liebherr-Russland OOO Moscow

62 Annual Report 2020 Africa / Near and Middle East

United Kingdom Algeria Liebherr-Great Britain Ltd. Liebherr Algérie, EURL Biggleswade Algiers Liebherr-Rental Ltd. Biggleswade Ghana Liebherr Sunderland Works Ltd. Liebherr-Ghana Ltd. Sunderland Accra

Morocco Liebherr-Maroc SARL Casablanca

Mozambique Liebherr-Mozambique, Lda. Maputo

Nigeria Liebherr-Nigeria Ltd. Abuja (90 %)

Saudi Arabia Saudi Liebherr Company Ltd. Jeddah (60 %)

South Africa Liebherr-Africa (Pty) Ltd Springs

United Arab Emirates Liebherr Equipment Services Middle East L.L.C. Dubai Liebherr Middle East FZE Dubai

Zambia Liebherr Zambia Ltd. Lusaka

Group Companies 63 North America Central and South America

Canada Argentina Liebherr-Canada Ltd. Liebherr-Argentina S. A. Burlington, ON Buenos Aires

Mexico Brazil Liebherr Mexico, S. de R. L. de C. V. Liebherr Aerospace Brasil Eireli Mexico City Guaratinguetá Liebherr Monterrey, S. de R. L. de C. V. Liebherr Brasil Eireli Monterrey Guaratinguetá Liebherr Servicios Monterrey, S. de R .L. de C. V. Monterrey Chile Liebherr Chile SpA USA Santiago de Chile HL Farm, LLC Newport News, VA Colombia Liebherr Aerospace Saline, Inc. Liebherr Colombia SAS Saline, MI Bogotá D.C. Liebherr-America, Inc. Newport News, VA Panama Liebherr Automation Systems Co. Liebherr Panama S. A. Saline, MI Panama City Liebherr Gear Technology, Inc. Saline, MI Peru Liebherr Mining Equipment Newport News Co. Liebherr Peru S.A.C. Newport News, VA Lima Liebherr USA, Co. Newport News, VA

64 Annual Report 2020 Asia and Oceania

Australia PR China Liebherr-Australia Pty. Ltd. Liebherr (China) Co., Ltd. Adelaide Shanghai Liebherr (HKG) Limited India Hong Kong SAR Liebherr Appliances India Private Limited Liebherr LAMC Aviation (Changsha) Co., Ltd. Mumbai Changsha (50 %) Liebherr CMCtec India Private Limited Liebherr Machinery (Dalian) Co., Ltd. Pune Dalian Liebherr India Private Limited Liebherr Purchasing (Dalian) Co., Ltd. Mumbai Dalian Liebherr Machine Tools India Private Limited Liebherr Transportation Systems (China) Co., Ltd. Bangalore (60 %) Pinghu Xuzhou Liebherr Concrete Machinery Co., Ltd. Indonesia Xuzhou PT. Liebherr Indonesia Perkasa Zhejiang Liebherr Zhongche Balikpapan Transportation Systems Co., Ltd. Zhuji (70 %) Japan Liebherr Japan Co., Ltd. Singapore Yokohama Liebherr-Singapore Pte Ltd Singapore Kazakhstan Liebherr Kasachstan TOO South Korea Almaty Liebherr Mobile Cranes Korea Ltd. Seoul Malaysia Liebherr Appliances Kluang SDN. BHD. Thailand Kluang Liebherr (Thailand) Co., Ltd. Liebherr Sales Kluang SDN. BHD. Rayong Kluang

New Caledonia Liebherr-Nouvelle-Calédonie SAS Nouméa

Group Companies 65 06

Consolidated Financial Statements

Consolidated Balance Sheet...... 68 Consolidated Income Statement...... 69 Consolidated Statement of Comprehensive Income...... 70 Consolidated Statement of Changes in Equity...... 70 Consolidated Cash Flow Statement...... 71 Notes to the Consolidated Financial Statements...... 72 Report of the Statutory Auditor...... 88 Five-Year Summary...... 89

66 Annual Report 2020 67 Consolidated Balance Sheet

Assets in € m Notes 31/12/2020 % 31/12/2019 %

Intangible assets 3.1 37 0.3 42 0.3

Tangible assets 3.2 3,567 25.9 3,798 26.6

Shares at equity 3.5 12 0.1 13 0.1

Non-current financial assets 3.6 159 1.2 196 1.4 Deferred tax assets 8 236 1.7 323 2.2

Non-current assets 4,011 29.2 4,372 30.6

Inventories 4.1 4,099 29.8 4,425 31.0

Receivables 4.2 / 4.3 2,086 15.2 2,283 16.0

Income tax receivables 8 77 0.6 103 0.7

Current financial assets 4.5 1,424 10.4 1,377 9.6 Liquid funds 4.6 2,036 14.8 1,728 12.1

Current assets 9,722 70.8 9,916 69.4

Total assets 13,733 100.0 14,288 100.0

Equity and liabilities in € m

Subscribed capital 62 0.5 62 0.4 Revenue reserves 2.3 / 5 7,706 56.1 7,807 54.6

Equity of Liebherr-International AG shareholders 7,768 56.6 7,869 55.0

Non-controlling interests 16 0.1 15 0.1

Equity 7,784 56.7 7,884 55.1

Non-current financial liabilities 6 1,376 10.0 1,364 9.6

Post-employment benefits 9 1,013 7.4 966 6.8

Deferred tax liabilities 8 60 0.4 45 0.3

Non-current provisions 10 46 0.3 40 0.3 Other non-current liabilities 7 82 0.6 76 0.5

Non-current liabilities 2,577 18.7 2,491 17.5

Current financial liabilities 6 921 6.7 1,162 8.1

Payments received in advance 283 2.1 346 2.4

Income tax liabilities 8 112 0.8 103 0.7

Current provisions 10 643 4.7 608 4.3 Other current liabilities 7 1,413 10.3 1,694 11.9

Current liabilities 3,372 24.6 3,913 27.4

Total equity and liabilities 13,733 100.0 14,288 100.0

68 Annual Report 2020 Consolidated Income Statement

in € m Notes 31/12/2020 % 31/12/2019 %

Sales revenue 11 10,341 95.2 11,750 95.3

Increase or decrease of work in progress and finished goods -155 -1.4 7 0.1

Other own work capitalised 329 3.0 312 2.5 Other operating income 344 3.2 257 2.1

Operating income 10,859 100.0 12,326 100.0

Cost of materials – 5,452 – 50.2 – 6,299 – 51.1

Personnel expenses – 2,847 – 26.2 – 2,980 – 24.2

Depreciation on non-current assets 3 – 543 – 5.0 – 541 – 4.4 Other operating expenses – 1,601 – 14.7 – 1,903 – 15.4

Operating expenses – 10,443 – 96.1 – 11,723 – 95.1

Operating result 416 3.9 603 4.9

Finance income 617 5.7 603 4.9

Finance cost – 755 – 7.0 – 458 – 3.7 At equity result 0 0.0 0 0.0

Finance result – 138 –1.3 145 1.2

Result before tax 278 2.6 748 6.1

Taxes on income 8 – 271 – 2.5 – 319 – 2.6

Result after tax 7 0.1 429 3.5

of which shareholders of Liebherr-International AG 7 0.1 429 3.5 of which non-controlling interests 0 0.0 0 0.0

Consolidated Financial Statements 69 Consolidated Statement of Comprehensive Income

in € m 31/12/2020 31/12/2019

Result after tax 7 429

Post-employment benefits – 6 – 148 Deferred tax –34 31

Items not recycled to profit or loss – 40 – 117

Foreign exchange translation differences – 104 40 Changes of fair value in cash flow hedges 74 – 21 Deferred tax – 13 7

Items recycled to profit or loss – 43 26

Other comprehensive income – 83 – 91

Comprehensive income – 76 338

of which shareholders of Liebherr-International AG – 76 338 of which non-controlling interests 0 0

Consolidated Statement of Changes in Equity

Value Foreign Equity of fluctuations exchange Other Liebherr- Non- Subscribed on financial translation revenue International AG controlling Group in € m capital instruments differences reserve shareholders interests equity

31/12/2018 62 6 0 7,485 7,553 17 7,570

Result after tax 429 429 0 429

Other comprehensive income – 14 40 – 117 – 91 0 – 91

Comprehensive income – 14 40 312 338 0 338

Dividends – 22 – 22 – 2 – 24

Changes in shares of noncontrolling interests 0 0 0 0

31/12/2019 62 – 8 40 7,775 7,869 15 7,884

Result after tax 7 7 0 7

Other comprehensive income 61 – 104 – 40 – 83 0 – 83

Comprehensive income 61 – 104 – 33 – 76 0 – 76

Dividends – 24 – 24 0 – 24

Changes in shares of non-controlling interests – 1 – 1 1 0

31/12/2020 62 53 – 64 7,717 7,768 16 7,784

70 Annual Report 2020 Consolidated Cash Flow Statement

in € m 31/12/2020 31/12/2019

Result after tax 7 429

Depreciation on non-current assets 543 541

Value fluctuations marketable securities (current assets) 7 – 121

Gain / Loss on disposal of non-current assets 2 1

Change of provisions and post-employment benefits 88 55

Other non-liquid expenses / income 190 – 16

Change of stock 195 110

Change of receivables and other current assets 227 24

Change of other liabilities – 289 – 31

Change of rental fleet – 122 – 19

Net cash flow from operating activities 848 973

Payment for investments in intangible assets – 10 – 33

Payment for investments in tangible assets – 250 – 402

Payment for investments in marketable securities in current assets – 112 – 103

Proceeds from sales of intangible assets 0 1

Proceeds from sales of tangible assets 14 23

Proceeds from sales of marketable securities (current assets) 58 90

Other proceeds from investing activities 15 0

Net cash flow from investing activities – 285 – 424

Dividends paid, other distributions and equity capital repaid – 24 – 24

Proceeds from current or non-current financial liabilities 438 400

Repayment of current or non-current financial liabilities – 643 – 442

Change non-controlling interests 1 0

Net cash flow from financing activities – 228 – 66

Net decrease / increase in liquid funds 335 483

Foreign exchange translation difference on liquid funds at beginning of period and on cash flows – 27 6

Liquid funds at beginning of period 1,728 1,239

Liquid funds at end of period 2,036 1,728

Income tax paid and reimbursed – 184 – 322

Interest paid – 32 – 38

Interest received 27 56

Consolidated Financial Statements 71 Notes to the Consolidated Financial Statements

1 Corporate information and business activity 2 Accounting policies The company was founded in 1949 by Dr. Hans Liebherr. Currently, the family business has more than 47,000 em- 2.1 General principles ployees working in more than 140 companies around the The Group’s consolidated financial statements for the world. The share capital of Liebherr‑International AG, Bulle year ended 31 December 2020 are prepared following (Switzerland) amounting to € 62 million (CHF 100 million) is the standards of the International Accounting Standards held exclusively by the Liebherr family. Board (IASB) in London.

For the construction sector and the mining industry, the They are in accordance with all International Financial Report- Group develops, produces and distributes construction ing Standards (IFRS) and interpretations by the International cranes, mobile cranes, crawler cranes, hydraulic excava- Financial Reporting Interpretations Committee (IFRIC) applica- tors, material handlers, duty cycle crawler cranes, wheel ble for annual periods beginning on or after 1 January 2020. loaders, crawler loaders and tractors, pipelayers, telescopic handlers, mining trucks as well as concrete mixing The accounting and reporting principles applied to these plants, concrete pumps and truck mixers worldwide. In consolidated financial statements comply with Swiss Cor- addition, Liebherr develops, produces and distributes ship poration Law as well as with IFRS. The prior year values are cranes, floating cranes, offshore cranes, container and prepared in accordance with the same principles, insofar as mobile harbour cranes for the cargo handling industry newly applicable standards also apply to prior periods. worldwide. The activities range across machine tools, automation systems and engineering projects in the machine The annual financial statements are prepared according to and plant construction industry, and landing gears, flight the historical cost principle with transactions being rec- control and actuation systems as well as air management ognised and reported in the period when they occur. Any systems in the aerospace industry. Furthermore, Liebherr divergence from this principle is specifically mentioned. manufactures equipment for rail vehicles in the transpor- The reporting period of Liebherr‑International AG and its tation technology area. For household and commercial subsidiaries ends on 31 December. The functional currency refrigeration and freezing, Liebherr produces a variety is the euro, as it is the predominant currency in the Group. of products with high benefits for the end users. In the component area the Group specialises in the development, The measures taken by individual governments and local design and manufacture of products in the mechanical, authorities in connection with the spread of the corona- hydraulic and electric drive and control categories. More- virus in Europe since the beginning of March 2020 have over, Liebherr operates six hotels in Ireland, Austria and a differentiated impact on the Liebherr Group’s business Germany. activities and turnover. In preparing the consolidated financial statements, the increased uncertainties related to Covid-19, e.g. revenue recognition, inventory valuation or leases, were taken into account.

2.2 Published and newly applied standards, interpretations and amendments The following new standards, interpretations and amendments were relevant for Liebherr in 2020.

IAS 1 and IAS 8 The IASB has issued amendments to IAS 1 and IAS 8 to sharpen the definition of “material” and to harmonise the various definitions in the framework and in the standards themselves. The amendments are effective for financial years beginning on or after 1 January 2020. Earlier application is permitted.

72 Annual Report 2020 rights, or otherwise controls according to IFRS 10. IFRS 7 and IFRS 9 The IASB has issued amendments to IFRS 9, IAS 39 and The following company has been established during the IFRS 7 as a first response to the potential impact of IBOR financial year 2020: reform on financial reporting. The published amendments address financial reporting issues in the period before ‑ Liebherr Österreich Vertriebs‑ und Service GmbH, an existing reference rate is replaced with an alternative Bischofshofen (Austria). rate and address the impact on certain hedge accounting requirements in IFRS 9. In particular, the amendments Acquired companies are fully consolidated from the time affect certain hedge accounting requirements, whereby when the Group has control according to IFRS 10. They are these amendments are applied on the assumption that the accounted for using the purchase method under which reference rate on which the hedged cash flows and the identifiable assets, liabilities and contingent liabilities cash flows from the hedging instrument are based is not are measured at fair value on the date of acquisition. Any changed by the reform of the reference rate. remaining residual value is recorded as goodwill in the re- The amendments are effective for reporting periods begin- spective functional currency of the company acquired. Any ning on or after 1 January 2020. goodwill is not systematically amortised, but is reviewed for impairment at least on an annual basis. Framework The IASB issued its revised framework in 2018. Together Sold companies are deconsolidated at the time the Group with the revised framework, the IASB also issued amend- ceases to have control and any gain or loss is recognised ments to the references to the framework in individual in the income statement. standards and interpretations. Liebherr has applied the amendments as of 1 January 2020. Investments for which the Group does not exercise control but a significant influence are classified as associates or IFRS 16 and Covid‑19 joint ventures and accounted for using the equity method The IASB has taken measures around IFRS 16 to make it according to IAS 28 and IFRS 11. The Group’s share of net easier for lessees to account for leases during the coro- assets is presented in the balance sheet under shares at navirus pandemic. Accordingly, the lessee is granted the equity and the share of profit of joint ventures and asso- right to choose whether to continue to revalue the con- ciates is shown in the income statement under at equity tract or to apply simplification. Under simplification, for result. example, the lessee no longer has to assess whether a change related to the coronavirus pandemic also consti- The consolidated financial statements include invest- tutes a modification of the lease, provided that certain ments in joint ventures and associate companies. Material criteria are met in the contract modifications. However, the investments are as follows: Group does not exercise this option. These amendments are applicable for financial years beginning on or after 1 – Fors AG, Studen (Switzerland) June 2020. – Somatel‑Liebherr Spa, Ain Smara (Algeria) – OEMServices SA, Tremblay‑en‑France (France) – Aerospace Transmission Technologies GmbH, 2.3 Basis of consolidation Friedrichshafen (Germany) The consolidated financial statements are prepared based on the individual financial statements of Liebherr‑International AG and its subsidiaries, which are audited by independent auditors and prepared using consistent accounting policies. The consolidated financial statements include the annual financial statements of Liebherr‑International AG as a parent company and of all subsidiaries in which Liebherr‑Inter- national AG directly or indirectly holds a majority of voting

Consolidated Financial Statements 73 2.4 Translation of foreign currency the translation of the income statement and the cash Foreign currency transactions are converted at the spot flow statement, the average exchange rate of the annual rate as of the transaction date. Monetary assets and period is used. Exchange rate differences arising from the liabilities in foreign currency are translated at the balance conversion of the income statement of affiliated compa- sheet date exchange rate. All gains and losses are rec- nies are recognised separately in the other comprehensive ognised in the income statement. Assets and liabilities income until disposal. in financial statements of subsidiaries are converted to euros using the balance sheet date exchange rate. For

For the most significant currencies, the following exchange rates have been applied:

2020 2019 Year end rate in € Average rate in € Year end rate in € Average rate in €

Switzerland CHF 1 0.9258 0.9344 0.9213 0.8990 USA USD 1 0.8149 0.8775 0.8902 0.8933

Great Britain GBP 1 1.1123 1.1254 1.1754 1.1404

Australia AUD 1 0.6291 0.6047 0.6252 0.6210

Russia RUB 1 0.0109 0.0122 0.0143 0.0138

2.5 Financial instruments depends on the business model and the cash flow struc- A financial instrument is any contract that gives rise to ture. If the contractual details of the financial instrument a financial asset of one entity and a financial liability or give rise to cash flows that are solely payments of princi- equity instrument of another entity. Purchases and sales pal and interest on the principal amount outstanding, Lieb- of financial instruments are recognised using the trading herr will classify them as “Amortised cost” otherwise as date. “Fair value through profit or loss”. Thus, Liebherr recognis- es financial instruments that are recognised and measured Financial assets and liabilities are recognised when the differently depending on their allocation to the categories Liebherr Group becomes a party to the contractual obliga- specified in IFRS 9. tions of the instrument. Financial assets are derecognised when the contractual rights to receive cash flows are fully Financial instruments at fair value through profit or loss transferred to a third party or they have expired. In cases (fvtpl) where the rights to receive cash flows are neither trans- This category includes financial assets and liabilities clas- ferred nor retained, a derecognition is only relevant to the sified upon initial recognition at fair value through profit or extent that control has been transferred. If the Group has loss and financial assets, inclusive of derivatives, i.e. deriv- retained control, the Group continues to recognise the atives held for trading and not held as a hedging instrument instrument to the extent of its continuing involvement. according to IFRS 9. All financial instruments in this cate- A financial liability is not derecognised until the liability gory are measured at fair value with gains or losses arising is extinguished, i.e. when the obligation specified in the from changes in fair value recognised in the income state- contract is discharged or cancelled or expires. ment in the relevant period (finance income or finance cost). The adoption of IFRS 9 resulted in a change with respect In general, the fair value of the financial instrument base on to the classification and measurement of financial instru- market prices (Level 1 Inputs and Level 2 Inputs of the fair ments. The initial and subsequent measurement of the value hierarchy). Valuation techniques (Level 3 Inputs) using various financial instruments used by the Liebherr Group non‑observable input parameters are not applied. There

74 Annual Report 2020 were no financial instruments whose fair values could not be determined with sufficient reliability.

Amortised cost This category represents loans granted by Liebherr Group and accounts receivable trade. Financial assets within this category are recognised at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset upon initial recognition and subsequently measured at amortised cost. At each balance sheet date or under certain circumstances (e.g. significant financial difficulties of the debtor), the carrying amount of the financial instruments in this category are assessed for any impairment. Any impairment losses, which are determined by comparing the carrying value of the instrument to the fair value, are recognised in the income statement. If there is objective substantial evidence in subsequent periods that the impairment of an asset is no longer applicable, the previously recorded impairment loss is to be reversed. However, the reversal of the impairment loss may not create a carrying value that exceeds what the carrying value would have been if normal amortisation charges had been considered (not considering the impairment).

Other financial liabilities Other financial liabilities comprise all financial liabilities with the exception of derivatives. Financial liabilities are recognised initially at fair value including transaction costs. They are subsequently measured at amortised cost using the effective interest method. In addition to actual interest payments, finance costs include annual compound interest and pro rata transaction costs.

Financial guarantee contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss. This loss incurs when a specified debtor fails to make payments in accordance with the original or modified terms of a debt instrument. In some cases, the creditworthiness of customers is guaranteed by the Lieb- herr Group to the financing party, i.e. a financial guarantee contract is issued.

Consolidated Financial Statements 75 3 Non‑current assets

3.1 Intangible assets Development costs for new products are not capitalised, as the future economic benefit can only be demonstrated Intangible assets acquired separately are measured initially after a regulatory approval and a successful launch of the at acquisition costs. Internally generated intangible assets products in the market. from which the Group expects to receive a future benefit and which can be measured reliably are capitalised at their All intangible assets are amortised over the lower of their corresponding production costs. The production costs expected economic useful life or the contractual length include all costs directly attributable to the production pro- using the straight‑line method. Intangible assets with cess and a proportionate share of production‑related over- indefinite useful lives are not amortised but are tested for heads. Borrowing costs are not capitalised, as by definition impairment annually. intangible assets are not qualifying assets.

The estimated useful lives of the major classes of intangible assets are as follows:

Concessions 3 years

Industrial property rights and similar rights 3 years

Licences 3 years

Software 3 – 5 years

3.2 Tangible assets of rental machines is recognised as revenue. The reversal Tangible assets are measured at costs less cumulative depre- of the related remaining book value from the disposal is ciation and cumulative impairment. As a depreciation method treated as cost of materials. Tangible assets are derecog- the straight‑line method is used with a depreciation period nised upon disposal or when no future economic benefit is corresponding to the useful life. Land is not depreciated on expected from their use. a systematic basis. Maintenance costs are capitalised when they extend the useful life or the production capacity of the Borrowing costs directly attributable to the purchase, asset. Other maintenance costs and repairs are recognised in construction or manufacturing of a qualified asset are the income statement as incurred. capitalised during the period until the asset is brought into service and afterwards depreciated over the useful life of Any gain or loss arising from the disposal of an asset is in- the asset. Other borrowing costs are treated as expenses. cluded in other operating income or expenses. The disposal

The estimated useful lives of tangible assets are as follows:

Buildings 20 – 40 years

Machinery and equipment 5 – 21 years

Furniture 13 years

IT 3 – 5 years

Vehicles 5 – 11 years

76 Annual Report 2020 Consolidated Financial Statements 77 Development of tangible assets as at 31/12/2020:

Land and Technical equip. Other equip.,factory Adv. paym., assets in € m buildings and machinery and office equip. under construction Total

Acquisition and production cost as at 1/1 3,523 2,686 1,684 209 8,102

Additions 45 361 90 99 595

Disposals – 21 – 328 – 61 – 3 – 413

Transfers 82 44 20 – 148 – 2

Foreign exchange differences – 84 – 41 – 33 – 4 – 162

Acquisition and production cost as at 31/12 3,545 2,722 1,700 153 8,120

Accum. depreciation and impairment as at 1/1 1,425 1,671 1,207 1 4,304

Depreciation of the year 144 215 143 0 502

Accum. depreciation on disposals – 17 – 129 – 53 0 – 199

Impairment 16 5 3 0 24

Transfers 0 1 – 1 0 0

Foreign exchange differences – 30 – 25 – 22 – 1 – 78

Accumulated depreciation as at 31/12 1,538 1,738 1,277 0 4,553

Net book value 31/12 2,007 984 423 153 3,567

78 Annual Report 2020 Development of tangible assets as at 31/12/2019:

Land and Technical equip. Other equip., factory Adv. paym., assets in € m buildings and machinery and office equip. under construction Total

Acquisition and production cost as at 1/1 3,334 2,696 1,567 252 7,849

Additions 80 350 115 179 724

Disposals – 22 – 447 – 74 – 6 – 549

Transfers 92 64 60 – 218 – 2

Foreign exchange differences 39 23 16 2 80

Acquisition and production cost as at 31/12 3,523 2,686 1,684 209 8,102

Accum. depreciation and impairment as at 1/1 1,287 1,605 1,101 1 3,994

Depreciation of the year 139 230 151 0 520

Accum. depreciation on disposals – 15 – 169 – 65 0 – 249

Impairment 0 2 0 0 2

Transfers 0 -9 9 0 0

Foreign exchange differences 14 12 11 0 37

Accumulated depreciation as at 31/12 1,425 1,671 1,207 1 4,304

Net book value 31/12 2,098 1,015 477 208 3,798

Other equipment, factory and office equipment include The carrying amount of land and buildings contains the mainly computer equipment, furniture, vehicles, transpor- capitalised borrowing costs amounting to € 4 million (2019: tation equipment, tools and fixtures. € 5 million).

The net book value of € 3,567 million (2019: € 3,798 million) corresponds to 43.9 % (2019: 46.9 %) of the historical cost. The recognised impairment loss relates to the rental equipment.

Consolidated Financial Statements 79 3.3 Leasing and rewards incidental to ownership of an asset is trans- Liebherr acts mainly as a lessor and only in cases a pur- ferred to the lessee. Depending on the extent of the trans- chase is legally or economically not efficient, Liebherr fer of risk and rewards, the lease is classified as finance Group is a (long‑term) lessee. The adoption of IFRS 16 lease or as operate lease. Self‑constructed assets capital- implies that Liebherr has to recognise both a right‑of‑use ised under tangible assets but leased out under an operate asset and a lease liability. The majority of cases in this lease are recognised at production costs. All other leased- context concern land and buildings, but also machinery. out equipment is recognised at acquisition costs. All rental The lease liability is measured at the beginning of the equipment is depreciated using the straight‑line method lease term at the present value of the unpaid lease pay- according to the asset’s useful life reflecting the lower of ments and discounting is based on the marginal borrowing the market value or the calculated residual value of the costs. asset. Lease income from operating leases is recognised in the income statement on a straight‑line basis. With The practical expedients given in IFRS 16 with respect to respect to financial leases, a receivable is recognised at small ticket leases and short-term leases, implying that a an amount equal to the net investment in the lease. Lease recognition of a right‑of‑use asset and a lease liability is payments are divided into interest and principal payments. avoided, are interpreted and applied correspondingly at Liebherr. A short‑term lease is defined as a lease that, at For sale and leaseback transactions, established at fair the commencement date, has a lease term of 12 months or value, the corresponding profit or loss is recognised. less, does not include an option to purchase the underlying asset and refers mainly to warehouses at short notice Generally, a multistage lease contains a head lease and and flats. Small ticket leases refer to leases for which the a sublease. In multistage leases, Liebherr Group is both underlying asset is of low value, i.e. a low present value of lessor and lessee. Accounting for the head lease implies the lease payments, and subsumes assets such as printers a recognition of a right‑of‑use asset and a corresponding or other office equipment. Intangible assets are not within lease liability. In subleases, Liebherr Group decides on the scope of IFRS 16. In determining the lease liability the basis of the corresponding criteria for lessors in IFRS both variable lease payments that depend on an index or 16 and on the basis of the right‑of‑use asset of the head a rate and amounts expected to be payable by the lessee lease whether the sublease should be classified as a under residual value guarantees are included. finance lease or as an operate lease.

The initial measurement of the right‑of‑use asset is based 3.4 Impairment of non‑current assets on the value of the initial measurement of the lease liabili- Impairment losses on intangible and tangible assets will ty. Scheduled depreciation is carried out over the econom- be recognised at each reporting date if there are indica- ic useful life if the asset is transferred to the lessee at the tions that, following an event or due to changing circum- end of the term, or the lessee will exercise an existing pur- stances, the book value is overvalued. If the carrying chase option with sufficient certainty. If the lease trans- amount of an asset exceeds the recoverable amount (value fers ownership of the underlying asset to the lessee by in use or fair value less costs to sell) the asset will be the end of the lease term or if the cost of the right‑of‑use written down to this lower amount. If necessary, intan- asset reflects that the lessee will exercise a purchase gible and tangible assets are combined to cash‑generating option, Liebherr depreciates the right‑of‑use asset from units. the commencement date to the end of the useful life of the underlying asset. Otherwise, depreciation is based 3.5 Joint ventures and associated companies the right‑of‑use asset from the commencement date to Shares in joint ventures and associated companies are the earlier of the end of the useful life of the right‑of‑use accounted for using the equity method of accounting. asset or the end of the lease term. The right‑of‑use asset is regularly tested for impairment. 3.6 Non‑current financial assets Non‑current financial assets comprise non‑current leasing Liebherr Group is a lessor of self‑made machines. IFRS receivables, loans and non‑current marketable securities. 16, Leases, contains also provisions according to which a Loans are classified as “Amortised Cost”. Marketable decision has to be made whether substantially all the risks securities are measured at fair value through profit or loss.

80 Annual Report 2020 Management of these financial assets is in accordance with a documented investment strategy and their performance is assessed based on the change in fair value.

Consolidated Financial Statements 81 4 Current assets

4.1 Inventories Inventories are recognised at acquisition or production Raw materials and merchandise are generally measured costs. Production costs includes costs directly related to at acquisition costs. For raw materials, the acquisition the units of production and a systematic allocation of fixed cost reflects the lower of the last purchase price and the and variable production overheads. The allocation of fixed weighted average price. Sufficient allowances are record- production overheads is mostly based on the normal ca- ed for risks with regard to obsolescence and surplus stock pacity of the production facilities; otherwise it is based on as well as for losses of pending transactions by deprecia- the actual level of production. Selling costs, administrative tion or writing down to the net realisable value. overheads and borrowing costs are not capitalised.

in € m 2020 2019

Raw materials and supplies 1,542 1,702 Work in progress 818 933

Finished goods and merchandise 1,729 1,782 Payments made in advance for inventories 10 8

Total 4,099 4,425

4.2 Construction and service contracts cases at Liebherr, this three‑step procedure may be avoid- For specific construction and service contracts, revenue ed and instead, a simplified approach may be employed in is, more often than not, recognised over time. The dom- order to calculate the lifetime expected loss. Furthermore, inating input‑based approach to determine the stage of dependent on the different residual terms a provision completion at Liebherr Group is the cost‑to‑cost method. matrix as a practical expedient for determining the ex- The cost‑to‑cost method determines the stage of comple- pected loss on accounts receivables in the sense of stage tion according to the ratio of the contract costs incurred allowances is calculated. The mentioned provision matrix up to the balance sheet date to the estimated total specifies fixed provision rates depending on the number of contract costs with the corresponding sales per period days that a trade receivable is past due. It is assumed that to be recorded. However, output methods can also be these provision rates approximate the default probability based on physical partial services or contractually defined of trade receivables in the sense of the lifetime expected milestones. Both the cost‑to‑cost method and the out- loss approach. A single allowance for doubtful accounts put‑based method are established and applied at Liebherr is recognised when there is objective evidence that such resulting in an appropriate disclosure of the control trans- receivables are not recoverable (e.g. due to bankruptcy, fer of services and products over time. payment default or other financial difficulties of the debt- or). The amount of the loss is measured as the difference between the asset’s carrying amount and the present 4.3 Accounts receivable value of estimated future cash flows. The allowance is Receivables are initially recognised at the transaction based on internal Group guidelines, according to which price. Accounts receivable are classified as “Amortised individual allowances must be deducted first. The payment Cost”. terms and outstanding receivables are regularly monitored The IFRS 9 impairment approach for financial instruments locally by all subsidiaries. Furthermore, safeguards in the is based on a three‑step procedure. But regarding the form of prepayments and down payments are established. impairment of accounts receivable without an underlying financing component, representing the vast majority of the

82 Annual Report 2020 4.4 Derivative financial instruments asset or liability or a highly probable future transaction or Within the Liebherr Group, this position predominantly the foreign currency risk in an unrecognised firm commit- includes forward currency contracts, currency options, ment. Exclusively in the aerospace division, Liebherr Group currency swaps, interest rate swaps and interest rate uses hedging instruments in cash flow hedges. Thereby currency swaps to hedge its foreign exchange and interest the exposure to variability of future cash flows in foreign rate risks. All derivatives, if they do not qualify for hedge currencies which could have an effect on profit and loss accounting in accordance with IFRS 9, are classified as is hedged. The effective portion of the gain or loss of the financial instruments at fair value through profit or loss. hedging instrument is recognised in other comprehensive income when the criteria for hedge accounting are fulfilled. To hedge the interest and foreign currency risks resulting These other comprehensive income amounts reflecting from its operational activities, financial transactions and the cumulated value changes of the hedging instruments investments, the Liebherr Group makes use of derivative are, simultaneously, transferred to the income statement financial instruments. The goal is to reduce volatility in the when the hedged transaction affects profit or loss or upon income statement. A hedging relationship must fulfil vari- initial recognition of an asset or a liability. If the forecasted ous criteria relating to the documentation, the probability transaction is no longer expected to occur, the hedge is no of occurrence, the effectiveness of the hedging instrument longer effective and the amounts previously recognised and the reliability of the measurement in order to qualify in other comprehensive income are transferred to the for hedge accounting in accordance with IFRS 9. income statement. The ineffective portion of the gain or loss of the hedging instrument is recognised directly in the Under certain circumstances, a derivative financial instru- finance result. ment designated as a hedging instrument can be used to hedge the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised

4.5 Current financial assets loss. The management of these assets is based on a writ- The financial assets in these categories are classified, ten investment strategy and performance is measured on based on an internal risk management and investment fair value. strategy, as financial assets at fair value through profit or

in € m 2020 2019

Shares 391 418

Mutual funds 136 114

Fixed income securities 851 836 Other securities 40 3

Total securities and other financial assets at fair value 1,418 1,371

Fixed deposits with a residual term more than three months 6 6

Total 1,424 1,377

Consolidated Financial Statements 83 4.6 Liquid funds In addition to cash on hand and cash in banks, short‑term Under this position, the effective portion of the gain or deposits with an original maturity of three months or less loss of the hedging instrument in a cash flow hedge is are considered as liquid funds. recognised in accordance to IFRS 9 in other comprehensive income (OCI) without being recorded in the income state- 5 Equity ment. The share capital of Liebherr‑International AG is divided into registered shares. The revenue reserve contains the In equity, exchange differences arising from the transla- legal reserve of Liebherr‑International AG as well as the tion of assets and liabilities from the individual closings retained earnings of the other subsidiaries. Additionally, of foreign subsidiaries into the presentation currency are the balance includes the free reserves of Liebherr Inter- included. national AG as well as reserves and profits from previous years of the consolidated companies.

6 Financial liabilities The following table gives an overview of the financial liabilities: in € m Current Non-current Total 2020 Current Non-current Total 2019

Bank liabilities 887 1,233 2,120 1,129 1,199 2,328 Liabilities from leases 33 143 176 33 165 198 Bank liabilities from discounted bills 1 0 1 0 0 0

Total 921 1,376 2,297 1,162 1,364 2,526

7 Other liabilities The following table gives an overview of the other liabilities: in € m Current Non-current Total 2020 Current Non-current Total 2019

Liabilities from repurchase obligations 19 43 62 50 37 87 Accounts payable trade 655 0 655 795 0 795

Liabilities from personnel expenses and social security 313 0 313 346 0 346

Tax liabilities and customs 108 0 108 143 0 143

Derivative financial instruments 8 0 8 54 0 54

Contract Liabilities 169 0 169 170 0 170

Deferred income 10 0 10 11 0 11 Further liabilities 131 39 170 125 39 164

Total 1,413 82 1,495 1,694 76 1,770

84 Annual Report 2020 8 Taxes Deferred taxes are charged or credited directly to other Taxes include both current and deferred taxes. Current comprehensive income if the taxes relate to items that income taxes (income or corporation tax, business tax and are credited or charged directly to other comprehensive corresponding foreign taxes) are the amounts resulting income in the same or a different period. from taxable income or loss to be paid to or recovered from the relevant tax authority. Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set Current income taxes for the actual period and prior periods off current tax assets against current income tax liabilities are recognised as a liability to the extent that they have and the deferred income taxes relate to the same taxable not yet been paid. If the amount already paid in respect of entity and the same tax authority. current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. The benefit 9 Employee benefits relating to a tax loss that can be carried back to recover Employee benefits consist of pension obligations, com- current tax of a previous period is recognised as an asset. mitments related to anniversary bonuses and partial retirement agreements. There are various employee Current tax liabilities (tax assets) for the actual and prior benefit plans in the Group, which are individually aligned periods are measured at the amount expected to be paid with local conditions in their respective countries. They to (recovered from) the taxation authorities, using the tax are financed either by means of contributions to legally rates (and tax laws) that have been enacted at the report- independent pension / insurance funds, or by recognition ing date or that will be enacted in the near future. Current as employee benefit liabilities in the balance sheet of the income taxes are recognised in the income statement, respective subsidiaries. except current income taxes relating to items previously recognised in other comprehensive income. The net periodic costs with regards to defined contribution plans to be recognised in the income statement are the Deferred tax assets and liabilities are recognised in agreed contributions of the employer. In case of defined accordance with IAS 12 for temporary differences be- benefit plans, the period costs are determined by means of tween the carrying amount of an asset or liability in the actuarial valuations by external experts using the projected balance sheet and its tax base. The deferred tax assets unit credit method which are prepared on a regular basis. also include future tax reductions from the expected use of losses brought forward. Deferred tax assets are only The calculation of net periodic costs and employee benefit recognised if there is sufficient probability that future liabilities implies that statistical methods and variables taxable profit will allow the deferred tax asset to be re- are employed. These variables include, for example, esti- covered. Deferred tax assets and liabilities are measured mations and assumptions concerning the discount rate. at the tax rates that are expected to apply to the period Furthermore, actuaries use a wide range of statistical when the asset is realised or the liability is settled. The information for actuarial calculation of employee bene- announcements of new tax rates (and new tax laws) by the fit liabilities which can deviate significantly from actual government have been considered for the measurement of results due to changes in market conditions, the economic deferred tax assets and liabilities. The formal enactment situation as well as fluctuating rates of withdrawal and is not relevant unless the temporary differences balance shorter or longer life expectancy of benefit plan partici- themselves under the old tax law. pants.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be recovered. Conversely, a previously unrecognised deferred tax asset is recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Consolidated Financial Statements 85 10 Provisions visions will only be recognised if the respective costs can Provisions are only recognised in the balance sheet if be determined reliably by reference to a plan and if there the Liebherr Group has an obligation to a third party that is a corresponding obligation resulting from a contract or resulted from a past event, and if a reliable estimate of the notification. obligation can be made. Possible losses from future events are not recognised in the balance sheet. Restructuring pro-

Compensation Expected loss Provisions 2020 Warranty and product from pending Other in € m obligation liability transactions provisions Total

Current provisions 414 11 116 102 643 Non-current provisions 0 0 14 32 46

Total provisions 414 11 130 134 689

Reconciliation

31/12/2019 448 9 81 110 648 Increase 172 5 90 55 322

Usage – 157 – 1 – 29 – 16 – 203

Transfers 0 0 0 0 0

Reversal – 45 – 2 – 12 – 13 – 72

Discounting 0 0 0 0 0 Foreign exchange differences – 4 0 0 – 2 – 6

31/12/2020 414 11 130 134 689

Compensation Expected loss Provisions 2019 Warranty and product from pending Other in € m obligation liability transactions provisions Total

Current provisions 448 8 68 84 608

Non-current provisions 0 1 13 26 40

Total provisions 448 9 81 110 648

Reconciliation

31/12/2018 418 10 93 97 618 Increase 182 2 41 49 274

Usage – 128 – 1 – 39 – 12 – 180

Transfers 0 0 0 0 0

Reversal – 26 – 3 – 14 – 25 – 68

Discounting 0 0 0 0 0 Foreign exchange differences 2 1 0 1 4

31/12/2019 448 9 81 110 648

86 Annual Report 2020 11 Revenue recognition and profit realisation Sales proceeds from rental equipment disclosed under Liebherr adopts IFRS 15. The core principle of IFRS 15 is non‑current assets are not recognised until actual transfer that an entity will recognise revenue to depict the transfer of risks and rewards related to the assets occurs. of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five‑step model framework helping to calculate the amount and to determine whether the revenue is to be recognised at a point in time or over a period of time. The five‑step model requires the identification of the contract with a customer, the identification of the performance obligations, the determination of the transaction price, the allocation of the transaction price to the corresponding performance obligations and the recognition of revenue when the entity satisfies a performance obligation.

If partial invoices are created during the contractual term, revenue can be recognised during the contract period on the basis of the right‑to‑invoice approach, i.e. revenue is recognised in the amount of the invoiced amount.

Revenue recognition over time should reflect the transfer of control over the service to the customer according to the progress in fulfilling the underlying performance obligation. The dominating input‑based approach to determine the stage of completion at Liebherr Group is the cost‑to‑cost method. The cost‑to‑cost method determines the stage of completion according to the ratio of the contract costs incurred up to the balance sheet date to the estimated total contract costs with the corresponding sales per period to be recorded.

If Liebherr has determined that the performance obligation is not fulfilled over time, revenue recognition in reference to a specific point in time is assumed. Revenue recognition in reference to a specific point in time is, more often than not, the rule.

Revenue from operating leases is recognised on a straight line basis over the lease term, unless another systematic basis is more representative of the time pattern in which the user benefit derived from the leased asset is dimin- ished. As such, income from lease payments is recognised proportionally. The difference between payments received and income recognised is deferred.

Consolidated Financial Statements 87 Report of the Statutory Auditor ---

To the Board of Directors of Liebherr-International AG, Bulle Berne, April 1, 2021

Report of the independent auditor on the summary consolidated financial statements The accompanying summary consolidated financial statements of Liebherr‑International AG which comprise the consolidated balance sheet as of December 31, 2020, the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and related summary notes to the consolidated financial statements, are derived from the consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and audited in accordance with International Standards on Auditing (ISA). We expressed an unmodified audit opinion on those consolidated financial statements in our report dated April 1, 2021.

The summary consolidated financial statements do not contain all the disclosures required by IFRS. Reading the summary consolidated financial statements, therefore, is not a substitute for reading the audited consolidated financial statements of Liebherr‑International AG.

Board of Directors’ responsibility The Board of Directors is responsible for the preparation of a summary of the audited consolidated financial statements on the basis described in the notes to the summary consolidated financial statements.

Auditor’s responsibility Our responsibility is to express an opinion on the summary consolidated financial statements based on our procedures, which were conducted in accordance with International Standards on Auditing (ISA) 810, “Engagements to Report on Summary Financial Statements”.

Opinion In our opinion, the summary consolidated financial statements derived from the audited consolidated financial statements of Liebherr‑International AG for the year ended December 31, 2020 are consistent, in all material respects, with those consolidated financial statements, on the basis described in the notes.

Ernst & Young AG

Roland Ruprecht Salome Amherd Licensed audit expert Licensed audit expert (Auditor in charge)

88 Annual Report 2020 Five-Year Summary ---

in € m 2016 2017R* 2018 2019 2020 Sales revenue 9,009 9,812 10,551 11,750 10,341 Investments 751 778 829 756 605 Depreciation 466 499 513 541 543 Non-current assets 4,089 4,190 4,433 4,372 4,011 Current assets 8,572 9,012 9,352 9,916 9,722 Equity 7,051 7,369 7,570 7,884 7,784 Liabilities 5,610 5,833 6,215 6,404 5,949 Result after tax 298 319 321 429 7 Personnel expenses 2,413 2,538 2,790 2,980 2,847

2016 2017 2018 2019 2020 Employees 42,308 43,869 46,169 48,049 47,925

* Restatement first time adoption of IFRS 9 / 15 / 16

Consolidated Financial Statements 89 Liebherr-International AG • CH-1630 Bulle / FR • Phone: +41 26 913 31 11 • Fax: +41 26 913 31 31 www.liebherr.com